In both segments, the analysis accounts for HOA fees, management and administrative fees, property taxes, repair and replacement reserves, and added liability insurance costs were included. Mortgage interest costs were not included. "Owners should not expect much, if any, of their mortgage interest to be covered by their share of the rental income from the unit," according to the report.

On the revenue side, the analysis took into account historical hotel industry data such as occupancy, ADR, RevPAR and absorption rates, with adjustments to reflect the decreased occupancy rate due to owner consumption and increased room rate due to superior size and quality compared to most hotel room peers in the commercial market.

In the luxury segment the analysis found that in the best case scenario--a 50% net rent commission and a $10 per-sf HOA fee--an owner's annual net income would be $757 in 2008 and $2,238 per year in 2011. In the worst case scenario--a 35% net rent commission and a $16 per sf HOA fee--an owner would have to pony up about $9,000 per year to cover costs. The middle of the road scenario--a 40% net rental commission and a $12 per sf HOA fee or a 45% net rent commission and a $14 per sf HOA fee--results in negative annual net income of between $4,130 and $4,414 in 2008 and, in 2011, a negative annual net income of between $3,241 and $3,693.

In the Upscale segment, the analysis found that in the best case scenario--a 50% net rent commission and a $5 per-sf HOA fee--an owner's annual net income would be $1,893 in 2008 and $3,083 in 2011. In the worst case scenario--a 35% net rent commission and a $11 per sf HOA fee--an owner would have to pony up about $6,194 in 2008 to cover costs and $6,058 to cover costs in 2011. The middle of the road scenario--a 40% net rental commission and a $7 per sf HOA fee or a 45% net rent commission and a $9 per sf HOA fee--results in negative annual net income of between $1,961 and $2,341 in 2008 and, in 2011, a negative annual net income of between $1,331 and $1,644.

What isn't yet clear is how the units will increase in value on a re-sale basis, though steep price appreciation has been a sure thing in Las Vegas the past few years. "The unknown continues to be projecting appreciation rates," states the report. "Typically much can be determined by analyzing historic growth of pure residential condominium in an area; unfortunately, there has been little precedent of comparable pure condominium on or just off the Strip."

There will be in the coming years, however; according to Smith Travel, Las Vegas is the largest condo-hotel market in the country with some 28,288 condo hotel units in the development pipeline. The first two condo-hotel developments in the city-- Tower A of the three-tower Signature at MGM Grand, which opens this month, and Platinum, which is nearing completion just off the Strip at Flamingo Road near Koval Lane--each sold out in less than 60 days, according to Nacho. All told, 1,000 of the 1,500 units available at the MGM development have been sold.

Next up for MGM will be Project City Center north of the Bellagio, which will include a mix of 2,500 condo or condo-hotel units in addition to a boutique hotel and a retail center. Other Strip or near-Strip condo-hotel projects include a 600-unit tower at The Palms and a portion of the 3,000 units planned for Edge Group's W Las Vegas property at Harmon and Koval.