Condotel
A condominium unit within a hotel that can be rented out as a short-term accommodation.
Definition
A condotel (condo hotel) is a condominium unit located within a hotel or resort that the owner can use personally and also place into the hotel's rental program when not in use. Owners receive a share of the rental revenue, often managed by the hotel operator. Condotels offer the benefits of vacation property ownership with professional management and rental income potential. However, they are considered higher-risk by lenders due to income volatility tied to tourism, seasonality, and hotel market conditions. Financing options are limited compared to traditional condos, with higher rates and lower maximum LTVs.
How This Relates to DSCR Loans
Condotels are one of the most challenging property types for DSCR financing. Fewer lenders offer condotel programs, and those that do typically require lower LTV and stronger DSCR.
Related Terms
Short-Term Rental (STR)
A property rented for short stays (typically under 30 days), often listed on platforms like Airbnb and VRBO.
Non-Warrantable Condo
A condominium that doesn't meet conventional lending guidelines due to its HOA, ownership concentration, or other factors.
Vacancy Rate
The percentage of time a rental property is unoccupied and not generating income.
Cash Flow
The net money remaining after all income is collected and all expenses and debt payments are made.
Compare rates from hundreds of lenders instantly. No personal info required.