In my opinion, San Diego’s Hard Rock Hotel is one of downtown’s best investment properties. Obviously I can’t predict the future, but I think that Hard Rock Hotel is a great buy. So far this year, there have been 22 sales at the HRH. Of those 22 sales, only two buyers had not previously owned a unit at the HRH. Additionally, one of the “new” buyers purchased two condos. What does all this mean? Presumably, it means that owners at the Hard Rock Hotel, really like owning these condos(even those who bought back in 2007 and 2008 at MUCH higher prices!).
Just like cars, or computers, or even ballpoint pens…repeat buyers are typically a result of a quality product. In this case, we’re seeing people who bought condos for $400-500K(on average) just 3-4 years ago, buy those same condos(more or less) for about $170-200K! To me, this means a few things:
So why do all these people want to buy at the Hard Rock? For starters, this is property that can generate revenue for the owner and still be used by the owner, pretty much whenever they want. Unlike traditional “rental properties,” owners at the Hard Rock Hotel can collect rent on their condo on a daily basis and are not restricted by weekly, monthly, or annual leases. This means that you as an owner, can rent out the room for most of the summer, but still come down and use it whenever you want!
At the Hard Rock Hotel in San Diego, owners get to use their condo-hotel 28 days a year for free. This includes valet parking, gym/internet access and of course, San Diego’s incredible weather(it’s 72 degrees out right now – it doesn’t matter when you read this). And if you don’t use up all of your 28 days, that means you might make more money(the more your room is available, the more it might get rented!). And for those of you who want to spend more than 28 days a year here(14 weekends), I can help you buy a few more condos.
I’ll give you some estimates on what some rooms might earn. Studios appear to bring in about $17-22K a year for the owners. This is their share. Owners would have to additionally pay HOA dues(about $580/mo) and property taxes(about 1.25% of the purchase price/yr). So if you pay $170K for a studio and it makes $20K/yr, after you pay HOAs and taxes, you’re looking at about 6.4% ROI. Not bad, right?
Now there are other factors to consider…
Even with all these “what if’s,” I think the Hard Rock is a great buy. There are risks, but I think they are small and predictable risks. With that said, it’s still your money and your decision. If you have any questions, please contact me. I’ve sold 15 condos at the Hard Rock and was part of the “in-house” resale team when I was working at Prudential. And yes, I’ve help people buy and short sell their units.
Click here to see what’s currently for sale at the Hard Rock Hotel(*I currently have additional units for sale that are not on the MLS and are not short sales).