With summer right around the corner, your clients may be dreaming of the perfect vacation getaway—one that offers the ultimate R&R: relaxation and rental income. Fortunately, there’s a perfect solution that can help them: Enter the world of condotels. These property types offer the ideal blend of luxury and investment potential. Not only do they offer vacation-level comfort, but they also provide buyers with potential rental income.
While condotels present an exciting investment opportunity, securing financing for them has become increasingly challenging – especially in today’s fluctuating market. Traditional lenders are more cautious about funding these properties, often requiring borrowers to submit higher down payments and extensive documentation. The secret to successfully closing these property types is simple: partner with a dependable alternative lender.
At LendSure, our Condotel Loan Program offers fast and flexible financing to a wide range of borrowers, allowing you to confidently grow this segment of your mortgage business. Here’s a quick rundown on what to expect when closing condotel loans.
What are Condotels?
First – let’s define what a condotel is. Condotels are unique property types that are exactly what they sound like: part condo, part hotel. They function as both a private residence and as part of a rental pool managed by a hotel operator. The best part? Since these are primarily sold as secondary homes, owners can choose to use them as vacation homes and rent them out when they’re not in use. This allows them to take advantage of rental income, helping offset ownership costs like mortgage fees and property taxes.
What are the benefits?
There are major benefits to purchasing a condotel – especially in today’s market where home prices are still on the rise. These properties give buyers an alternative (and more affordable!) option to grow their portfolios. Some benefits include:
Passive Income:
One of the main goals for investors is securing a property that not only appreciates in value but can also generate steady income. With Condotels, your clients can do just that! By renting out their unit, they can create a passive income stream that helps cover mortgage payments, property taxes, and other financial expenses – while also bringing in a significant profit each month.
Access to Amenities:
Besides the additional rental income, Condotel owners can take advantage of ultra-luxe amenities and services while staying at the property. Think concierge, wellness centers, housekeeping, and resort-style services – all within their fingertips.
Borrower Flexibility:
Condotel buyers enjoy many perks, but one of the top ones is flexibility. Not only can buyers generate income by renting out their unit when it’s not in use, but they also benefit from prime locations. Many condotels are generally located in high-demand tourist destinations, increasing their long-term investment potential.
Financing Condotels
While purchasing a condotel has many benefits, securing financing isn’t always easy. With traditional mortgages, lenders generally require standard income documentation and may offer more flexible terms (think lower credit scores). Condotels, on the other hand, are seen as riskier investment properties, requiring lenders to conduct a more in-depth analysis.
Some key factors lenders evaluate include:
- Higher down payments & interest rates compared to standard home loans.
- Comprehensive appraisals that assess not just the unit but the entire building.
- Key lender considerations, such as property age, location, structural integrity, and financial stability of the management company
Closing with LendSure Mortgage Corp. (LendSure)
As a loan officer, it’s crucial to partner with different alternative lenders that offer a wide range of mortgage solutions. Traditional banks may be your go-to for clients who are simply looking to finance a single-family home. However, if you want to offer buyers more options, partnering with an alternative lender like LendSure can help you confidently close otherwise difficult loans.
At LendSure, you and your clients can enjoy our industry-leading Bank Statement Program. The process is simple – instead of tax return documentation, they can submit 12 to 24 months of personal or business bank statements. This is ideal for those buyers (think small-business owners) who may have trouble providing traditional income docs.
Additionally, we have an expert team who is dedicated to providing fast (and flexible!) funding. The best part? We can send an extensive pre-qualification within 24 hours.
Other highlights include:
Up to 75% LTV for Purchase Loans
Up to 70% LTV for R&T Refinances (740 minimum credit score)
Up to 65% LTV for Cash-Out Refinances (740 minimum credit score)
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently-owned property.
Are you ready to benefit from a commonsense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.
