Sharing some information on condotels for those wanting to include this in their portfolio. Condotels are condominium units but professionally managed as hotels or serviced apartments with the unit owner getting a share of the income.

Here’s a Youtube video on condotels:

The video showed a projected annual ROR of 5.6% at 65% occupancy for Citadines Davao. Another upcoming condotel in Davao is Hotel 101 which shows a more optimistic projected ROR of 6.13% at 60% occupancy as seen in the table above. I also came accross a condotel from Megaworld in San Vicente, Palawan called Paragua Sands and their projected annual ROR is around the 5% mark as well.

These returns are a bit less compared to REITS, which at the moment have yields of 5.7 – 10.5%. Although the returns could go up if the occupancy rate is higher, my concern with condotels is that they tie up a lot of capital to a single property and the dividends are subject to the seasonality of the hospitality market and competition from traditional hotels and Airbnb.

I do see that this may appeal to investors who want a titled property in their name, avail the 10 days per year free use of the condotel and earn a decent return without managing the unit themselves.