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Resort properties managed by hotel operators are in demand among Russians

The global real estate market is as diverse as the tastes of buyers, and everyone on it finds something

for himself. Russians buy real estate abroad for various purposes and to each taste. Some are interested

in stable investments, others are looking for a cozy second home on the seashore, and others are

looking for luxury apartments in the centre of the capitals. Pensioners prefer houses with a kindergarten

in countries with a warm climate, where they can relax in the fresh air. A number of buyers are

interested in resort properties under the management of the hotel.

The resort real estate managed by the hotel is becoming increasingly popular among Russians who are

considering buying property abroad, but are not ready to permanently reside in this property or are

attracted to the developed infrastructure of the hotel operator, guarantees of safety and convenience.

Moreover, this makes it possible to provide additional income. Speaking about buying a resort property

with hotel services for russians, first of all, it is worth remembering that this is an investment in lifestyle

and its quality, and only then – a means to generate income. The main advantage of buying such a

residential property is that it does not require the owner absolutely no worries about maintenance, as

well as financial management related to the management of the property. Even the rental of “hotel”

real estate for rent is fully engaged in by the management company or hotel operator. The owner only

comes to his “second home” when it is convenient for him.

Sea resorts that are based on providing services by hotel operators, can be chosen near beach or marina

or other interesting tourist sites on their territory, or represent a “mixed type” of services for their

guests. Resorts in the mountains are not only ski destinations, but also combined destinations that can

be opened both in winter and all year round. Often, a golf course or other tourist infrastructure is

located nearby or directly in the resort. The most famous active mountain resorts include Andermatt

Swiss Alps in Switzerland, Kempinski das Tirol in Yorchberg, Edelweiss residences in Katchberg.

As a rule, golf resorts represent exclusively the infrastructure for playing golf and everything related to

it, however, there are also “mixed” options. Often, at such resorts, loyal players can purchase high-class

housing in which you can stay, visiting your favorite field, live permanently – or rent out your villa or

apartment. Some of the world's most popular hotel-serviced golf resorts include PGA Catalunya,

Catalonia, Aphrodite Hills, Cyprus, Sheraton Pine Cliffs, and Algarve.

Spa resorts are very popular among connoisseurs of quality relaxation, and accommodation on their

territory can be rented out well. Popular spa resorts with hotel services, such as St. Regis Mardavall in

Mallorca.

Despite the variety of resorts, in recent years there has been an increase in demand for resort property

managed by the hotel. Apartments and villas that are privately owned on the territory of the hotel

provide the owner with access to all the services and services of the resort / hotel in whose territory

they are located. The invoice also includes payments for utilities – water, electricity, sewage, and

insurance, including rental periods by third parties. To rent their “hotel” style housing for rent or not is

an individual decision of each owner. If he wants to earn extra income, he can do it easily.

As for equipment and furniture, for his own use the owner can either purchase his furniture and

appliances, or leave the apartment or villa in the form in which they were purchased. However, in the

case of rental housing, the hotel chain or the owner may require bringing the property into a single

“corporate identity”, which corresponds to all rooms or villas in the complex.

When it comes to owning an object in a hotel serviced condominium, this automatically assumes that

the property is fully serviced by the management company. It will include such expenses as the natural

depreciation of apartments, timely replacement of furniture, repair work, payment of insurance

premiums, etc. The owner does not have to worry about doing these “household” things: this is

especially convenient when he is not in the country.

The main advantage of owning property in the condominium is that the owner has full and free access

to his apartment or villa. In periods when he does not use his housing, he provides it for rent to third

parties. Rental income is distributed between the owner of the apartment, villa and management

company and is used by her to cover the costs associated with the maintenance of this facility,

equipment and the resort as a whole.

The owners of apartments and villas annually pay a share of operating expenses – such as expenses for

the repair and maintenance of apartments and facades, as well as the amount to maintain the so-called 

“reserve fund”. It is calculated on the basis of the footage of the apartments and villas owned. These

amounts are deducted by the management company from rental income.

Owners, of course, can make changes to the design of the apartment during their stay, with the

exception of furniture changes. Personal items such as pillows, appliances, etc. during the absence of

the owner are kept in stock.

In the case of owning resort property with hotel services, the owner has constant access to the 24-hour

reception, security, personal concierge, homeowners service team, restaurants and room service,

swimming pools, spas, gyms, etc.

The income from the rental of resort property managed by the hotel depends on how successful the

management company is in attracting the maximum rental income of the resort. The owner of an

apartment or villa in a seaside resort using the “condominium” formula in the long term can expect a

yield of 3.5-4.0% annually after paying all expenses and taxes.

The owner of an apartment or villa in a seaside resort according to the formula of serviced apartments

in the long term can receive an average return of about 7% annually, but at some point, after deducting

the costs of repairing and replacing furniture, the average return will noticeably decrease, and as a

result, usually will be 2.0-2.5%. This is simply due to the fact that rental profitability demonstrates

significantly underestimated optimization compared to apartments in condominiums.

Mountain resorts usually bring lower profitability due to the fact that the tourist seasons are much

shorter (short winter and summer seasons).  

News

The most popular investment instruments for Russian citizens are savings accounts in banks, foreign

currency, real estate, life insurance and cryptocurrencies.

The real disposable income of Russians in the third quarter fell by almost 5% after a record drop of

8.4% in the second, Rosstat reported.

In September 2020, the monthly increase in consumer prices (as estimated seasonally adjusted) decreased to 0.25% compared to 0.38% in August, according to the next release of the information and analytical commentary “Dynamics of consumer prices”.

Consumer demand in the first seven months of 2020 in Russia decreased due to the coronavirus pandemic by an average of 6.7% relative to the result of January-July 2019.
Net capital outflow in January-August 2020 increased 1.7 times compared to the data for the same period last year – from $20 billion to $34.8 billion.
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