I will under no circumstances sell my buying clients a unit in a hotel condominium.
There are a host of classic hotel-condo units in the downtown core—One King West, The Cosmopolitan Hotel, and The Metropolitan, to name a few—along with a slew of newer sexy, big-name projects like the Shangri-La and the Four Seasons. Obvious allure aside, I wouldn’t advise you to live in them.
First off, these units usually require a minimum 30 to 35 per cent down payment in order for a lender to approve a mortgage. Some banks won’t budge unless you put 50 per cent down; others have blacklisted these hotel-condo hybrids altogether.
Secondly, the monthly maintenance fees can be outrageous—up to $1.50 per square foot. (Consider that the average for condo fees in the downtown core hovers between $0.65 and $0.70.) Taxes for these units are often levied at commercial rates, so a 500-square-foot pad—which would ordinarily require $1,800 in annual taxes—might have you taxed in excess of $4,000.
Quite a few of these hotel-condo situations are also set up so that the two entities share expenses, so it’s not inconceivable that the hotel could funnel your money into its lobby lighting instead of your condo reserve fund.
Now is it any wonder why not a single unit at Trump Towers has been sold on MLS?