Condo vs Condotel: Vail Ownership Basics

Thinking about a Vail condo and keep hearing “condotel”? You’re not alone. In the Vail Valley, these two options can look similar from the outside, but they work very differently once you own them. The right choice comes down to how you plan to use the property, what kind of income or flexibility you want, and how comfortable you are with hotel-style operations.

In this guide, you’ll learn the key differences in ownership, use, fees, insurance, taxes, financing, and resale. You’ll also get a clear checklist for due diligence so you can move forward with confidence. Let’s dive in.

What each option means in Vail

A condominium is real property you own outright, plus a share of common areas, all governed by a recorded declaration and an association. In Colorado, condominium communities are governed by the Colorado Common Interest Ownership Act. A condo can often be used like a home, a long-term rental, or a short-term rental, depending on HOA rules and local regulations.

A condotel is a condo unit inside a building that operates like a hotel. There is typically a central front desk, housekeeping, reservations, and a rental program that owners join for part or all of the year. The project’s approvals and licensing are usually for lodging use, and hotel-style operations guide most day-to-day decisions.

How use and rules differ

Condo rules vary by association. Many allow full-time occupancy, long-term leases, or short-term rentals, subject to HOA and local regulations. Some HOAs set minimum lease terms or require guest registration.

Condotel rules are more structured. You may be required to put your unit into a rental pool for specific dates. Owner-use windows can be limited during peak seasons. Expect procedures for owner stays, such as advance notice and housekeeping standards that match hotel operations.

Who runs the building

Both property types have an association. In a condotel, daily operations like reservations, front desk, housekeeping, and marketing are usually handled by a professional management company under a separate agreement. Review who sets rental rates, who controls bookings, and how the budget and reserves are decided.

For traditional condos, the HOA focuses more on building maintenance, rules, and community standards. You or your property manager handle your own rentals unless the HOA has a coordinated program.

Fees, budgets, and reserves

Condotels often have higher monthly assessments because the budget includes hotel services such as 24/7 front desk, linen and laundry, daily cleaning, insurance suitable for lodging, and marketing. Mountain buildings also carry heavier capital needs for roofs, snow systems, mechanicals, and fire safety.

For any purchase, ask for the current budget, financials, and a reserve study. Review the history of special assessments. In a high-altitude climate, preventive maintenance and capital planning matter to your long-term costs.

Insurance and liability

Condotels typically require hotel-style master insurance. Owners may need different coverage than a standard HO-6 policy due to transient occupancy and amenity risks. Premiums can be higher than a comparable residential condo.

For a conventional condo, a typical master policy and an HO-6 for interior coverage may be sufficient, subject to the HOA’s requirements. Always confirm with the association and your insurance advisor.

Income potential and seasonality

Condotels are designed for transient lodging income, which is seasonal in Vail. Winter is the primary peak, and summer is the secondary peak. Shoulder seasons are variable and can be quiet. Rental pools may smooth your monthly distributions across owners, but fees and operating costs reduce net income.

If you are evaluating cash flow, request at least three years of operating history. Focus on gross revenue, net operating income, occupancy by month, average daily rate, and a full expense breakdown, including management and housekeeping.

Taxes and local licensing

Short-term rental income is taxable. Federal reporting generally follows the rules for rental property, and depreciation may apply. If hotel-type services like daily cleaning are provided, there can be different tax considerations. Consult a tax advisor and review IRS guidance for residential rental property.

At the state, county, and town level, lodging or occupancy taxes often apply to short stays. In Vail, owners or operators of lodging must register for the proper licenses and collect and remit applicable taxes. Requirements can change. Verify current rules with the Town of Vail, Eagle County, and the Colorado Department of Revenue so your operation stays compliant.

Financing and resale

Many lenders view condotels as more commercial. Some government-backed programs do not approve projects with hotel operations or a high share of investor-owned units. Buyers often use portfolio or specialized lenders, which may carry higher rates and stricter terms.

Resale demand for condotels depends on a unit’s income history, the management agreement, and buyer financing options. Traditional condos typically attract a broader pool of buyers, especially those seeking flexibility for full-time use or simpler financing.

Condo vs condotel at a glance

Note: Specific terms vary by project documents and permitting. Always review the declaration, rules, and any rental program agreement.

What to review before you buy

Use this checklist to confirm how a property really operates:

• Association and property documents
  • Recorded declaration, plat, and legal description.
  • Bylaws, rules, and any rental or hotel program addenda.
  • Current budget, financials, and reserve study.
  • Board meeting minutes for the past 12 to 24 months and any notices of pending special assessments or litigation.
• Rental and management items for condotels
  • Full rental program or management agreement. Note the term, termination rights, revenue split, owner-use rules, booking priority, and owner fees.
  • Historical financials: at least three years of gross revenue, NOI, occupancy by month, ADR, and detailed expenses.
  • Marketing channels used and any brand affiliations.
• Regulatory and fiscal compliance
  • Business licenses and lodging or short-term rental registrations.
  • Sales and occupancy tax account numbers and remittance history.
  • Zoning and permitting showing the property’s approved use.
  • Master insurance coverage and owner insurance requirements.
• Financing and title
  • Any restrictions on transfers in the declaration or hotel agreements.
  • Existing loans that affect the project or the unit.
  • Lender restrictions that could limit buyer financing.
• Physical condition and operations
  • Capital plans and timelines for major systems.
  • Service contracts for elevators, boilers, housekeeping, and linen.
  • Cold-weather risks and building protections.

When a condo fits vs when a condotel fits

Choose a condo if you want broader use options, simpler insurance, and wider financing choices. Condos can work well if you plan to live in Vail part or full time, prefer to control your own rentals, or want to keep carrying costs predictable.

Choose a condotel if you value hotel services, on-site amenities, and a turnkey rental platform. This path can make sense for owners who want professional operations, are comfortable with seasonal income, and accept higher fees and more rules in exchange for convenience.

How local expertise helps you

Vail properties are shaped by documents, permitting, and management quality. Two similar buildings can perform very differently. A seasoned local advisor helps you interpret reserve studies, compare management agreements, and align your lifestyle goals with the right building and location.

If you want private, data-driven guidance on specific projects and their documents, schedule a conversation. We will walk you through true operating costs, realistic revenue, and practical use rules before you write an offer.

Ready to talk through your plan? Schedule a private Vail market consultation with Unknown Company.

FAQs

Can you live full time in a Vail condotel?

• Possibly. Many condotel programs limit owner occupancy to protect hotel operations. Check the management agreement and HOA rules for any limits and notice requirements.

Do condotels earn steady year-round income in Vail?

• Income is seasonal, with strong winters and a solid summer. Shoulder seasons vary. Rental pools can help smooth distributions, but fees and costs reduce net income.

Are condotel HOA fees higher than condo fees?

• Often yes. Condotels fund hotel services, commercial-grade systems, and higher insurance, so monthly assessments are commonly higher than residential condos.

Are condotels harder to finance than condos?

• Usually. Some mortgage programs do not approve hotel-style projects. Buyers often use portfolio lenders with stricter terms, which can affect resale.

What lodging taxes apply to short-term rentals in Vail?

• Municipal, county, and state lodging or occupancy taxes often apply, along with state sales tax. Owners or managers must register, collect, and remit. Verify current rules with the Town of Vail, Eagle County, and the Colorado Department of Revenue.

What risks should I consider before buying a condotel?

• Revenue swings with seasonality, higher operating and HOA costs, management contract terms, changing local policies on short-term rentals, financing limits, and future capital assessments in a mountain climate.