Condotels

A condotel is a condo unit in a building run like a hotel, often with a rental program and front desk. Most standard lenders won't finance them.

Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated October 28, 2026

What lenders review

• The rental management agreement and any mandatory rental pool
• Unit size and whether it has a full kitchen
• The building's budget, reserves and insurance
• Rental income history if you'll use it to qualify

These are the situations where shopping more than 180 lenders matters most: one lender's "no" is often another's standard loan. Tell us about your situation.

What makes a unit a condotel

A condotel is a condo in a building run like a hotel: a front desk, daily housekeeping, a rental program managed by the hotel operator, and often restrictions on how many days owners can stay. Lenders treat it more like a commercial property than a home because its value depends on the hotel operation.

What specialty lenders check

• The rental program agreement and how revenue is split with the operator.
• The building's budget, reserves and any special assessments.
• Unit size (many require a minimum, often around 400–500 square feet) and whether it has a full kitchen.
• Owner-use limits and how much of the building the developer still owns.

Typical terms

Down payments of 25%–40%, rates above standard second-home loans, and stronger reserves. Some lenders count part of the unit's rental income toward qualifying; others use only your personal income.

Getting equity out

HELOCs on condotel units are rare. Owners usually use a cash-out refinance with a portfolio or non-QM lender, or a HELOC on their primary home.

Questions people ask

Can I use a condotel unit's rental income to qualify for a loan?

Some condotel lenders count documented rental income from the hotel program; others qualify you on personal income only.

Can I get a HELOC on a condotel?

Rarely. HELOCs on condotel units are rare, so owners usually get cash out through a cash-out refinance with a portfolio or non-QM lender, or with a HELOC on their primary home.

Is a condotel a good investment?

Whether a condotel is a good investment depends on the rental program's revenue split and fees, since the unit's value depends on the hotel operation. Read the management agreement closely before buying.

Before buying or borrowing on a condotel

• Read the rental program agreement: the revenue split, fees, and how long you're locked in.
• Ask for the building's budget, reserves and recent assessments.
• Check owner-use limits, blackout dates and whether you can use outside rental platforms.
• Confirm the unit's square footage and kitchen, which affect which lenders will consider it.
• Ask local lenders which condotels in the area they've financed recently.

Example

A buyer looks at a 520-square-foot condotel unit in a resort for $380,000. Conventional lenders decline. A portfolio lender offers 30% down, a rate about 1.5 points above a standard second-home loan, and requires 12 months of reserves. The rental program's revenue split gives owners 50% of room revenue after fees; the lender doesn't count it toward qualifying, so the buyer qualifies on salary alone.

Also asked

How is a condotel different from a condo with a rental program?

A condotel is run as a hotel, with check-in, daily housekeeping and the operator controlling rentals. Some regular condos allow owners to rent through a manager but don't operate as a hotel; those may qualify for standard financing.

Can I live in a condotel full-time?

Usually not. Most condotels limit how many days owners can stay, which is another reason lenders treat them as investment properties rather than homes.

Does a condotel appraise like a condo?

Not quite. A condotel appraisal relies on sales of similar condotel units, which can be scarce, and the appraiser may also consider the rental program's income.

Can I insure a condotel unit?

Yes. The building's master policy usually covers the structure, and you carry a policy for your unit's interior and liability. Some carriers treat condotel units as commercial or rental property, so get quotes from an agent familiar with resort properties, and confirm the lender's coverage requirements early.

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