The Difference Between a Strata Hotel and a Regular Strata Property with Resort Amenities
Understanding the distinctions between a strata hotel and a regular strata properties with resort amenities is important for potential purchasers and investors. Here’s a detailed explanation of the differences:
Strata Hotel
A strata hotel is a property where individual units (strata lots) are owned separately, but the entire property is operated as a hotel. Owners of these units typically place their units in a rental pool, which is managed by a hotel operator or management company.
Key Characteristics
Rental Income: Owners receive rental income from their units when they are rented out as part of the hotel operation. This income is often shared with the management company.
Professional Management: The property is managed by a professional hotel management company that handles reservations, housekeeping, maintenance, and marketing.
Usage Restrictions: Owners may have limited personal use of their units due to the hotel’s operational needs. There are often restrictions on how long and when owners can stay in their units.
Amenities: The property typically offers hotel-like amenities such as front desk services, concierge, housekeeping, and possibly restaurants and conference facilities.
Management Fees: Owners pay management fees, which cover the costs of running the hotel, including staffing, upkeep of common areas, and marketing expenses.
Advantages
Operate Legally in BC: Subject to certain conditions, strata hotels can legally operate in BC and are exempt from the Province’s Short-Term Rental Accommodations Act
Income Potential: Potential for steady rental income without the hassle of managing the property.
Professional Services: Access to professional hotel services and management.
Investment: Can be a good investment with potential for appreciation and rental income.
Disadvantages
Limited Use: Personal use of the unit may be restricted.
Fees: Strata fees can be substantial as they typically include numerous additional costs.
Market Dependency: Rental income can fluctuate based on tourism and hotel market conditions.
Regular Strata Property with Resort Amenities
A regular strata proeprty with resort amenities is a residential property where individual units are owned separately, and the complex offers resort-style amenities. These properties are not operated as hotels, and the owners typically use their units as primary residences, vacation homes, or rental properties.
Key Characteristics
Ownership and Use: Owners have more flexibility in using their units as primary residences, vacation homes, or renting them out independently. There are often no restrictions on personal use.
Self-Management: Units are not managed by a hotel operator. Owners are responsible for managing their own rentals or can hire a professional property managers if they choose.
Amenities: The complex may offer amenities similar to a resort, such as pools, fitness centres, spas, recreational facilities, and concierge services, but these are not part of a hotel operation.
Strata Fees: Owners pay strata fees for the maintenance of common areas and amenities. These fees are typically lower than those in a strata hotel since there are fewer operational costs.
Community: While this varies considerably by property, a regular strata with resort amenities may still have more of a residential community feel, with a greater number of owner occupants.
Advantages
Flexibility: Greater flexibility in personal use and rental management.
Community: Potential for a sense of community among residents.
Lower Fees: Typically lower strata fees compared to a strata hotel, though they will not include some of the costs associated with a strata hotel.
Disadvantages
Restriction on Short-Term Vacation Rentals : In all jurisdictions where BC’s Short-Term Rental Accommodation Act applies or has otherwise been adopted, a property is required to be the owner’s primary residence (as defined by the Act: the place where you live more than any other place) should they wish to offer the property to guests for short-term vacation rentals.
Self-Management: Owners are responsible for managing their own rentals, which can be time-consuming.
Income Variability: Rental income can be less predictable and depends on the owner’s effort and market conditions.
The primary differences between a strata hotel and a regular strata with resort amenities lie in their management, usage restrictions, and financial implications. Strata hotels offer professional management and potential rental income but come with usage restrictions and higher fees. Regular strata properties with resort amenities provide greater flexibility for personal use and independent rental management, often with a stronger sense of community and lower fees. Additionally, strata hotels have the unique benefit of legally operating as short-term vacations rentals while regular strata properties have a primary residence requirement. Understanding these distinctions can help purchasers make informed decisions based on their lifestyle preferences and investment goals.