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Condotels catch on fast — maybe too fast

Thousands of units under way in major real estate markets

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Charlotte Chipps, an Ohio schoolteacher, bought a condominium-hotel unit last year in Daytona Beach, Fla. A developer had bought up a couple of hotels in the area and converted the buildings into condotels -- which allow buyers to purchase individual units and gives them the option to enroll in a rental program that opens their units to hotel guests for a share of the rental income. "It was sort of a whim," she said. "I do own a house in the Daytona area that I rent. I had just that little bit of experience. I'm not a person with any money. I just thought that this would perhaps be an investment for me. If values continued to go up, I would keep it for two or three years and make $20,000 or $30,000." Meanwhile, at the southern end of the state, a swarm of new luxury high-rise condotel projects are in the works. The surge of condotel developments has hit other coastal markets too, and there are several high-end projects under development in downtown Las Vegas. Condotels run the gamut f...