Thinking about a pied-à -terre in Miami Beach and wondering if a condo-hotel can double as an income play? You are not alone. Many second-home buyers and investors weigh the comfort of hotel services against the control and financing flexibility of a traditional condo. In this guide, you will learn the key differences in ownership, use rules, financing, taxes, operations and resale so you can match the right property to your goals. Let’s dive in.
What you actually own
Traditional condominium
A condo gives you ownership of a defined residential unit plus an undivided interest in the building’s common elements. A condominium association governs operations under a recorded declaration, bylaws and house rules, along with the Florida Condominium Act. Your use is residential or seasonal, and any rental activity must follow the association documents and current Miami Beach rules. Service levels vary by building and are funded by the association.
Condo-hotel
A condo-hotel is a condo inside a building that operates as a hotel. You own the unit, but a hotel operator runs front desk, housekeeping and reservations, often under a brand or franchise agreement. You typically sign a management or owner program agreement that sets rental program terms, owner-use limits and service standards. Expect hotel-level amenities and fees tied to the hotel enterprise.
How you can use the unit
Owner use in condo-hotels
Condo-hotel ownership often limits how many nights you can use your unit and when. Blackout dates may apply during peak demand. Your owner stays may require advance notice and can be subject to hotel pricing and priority rules. These details live in the rental program and hotel management documents, so review them closely before you make an offer.
Rentals in traditional condos
Traditional condos may allow seasonal or long-term rentals based on the declaration and house rules. Minimum lease terms and the number of rentals per year are common limits. Miami Beach also has municipal rules that affect short-term rentals, and these can change. Do not assume rights to short-term rent unless the recorded documents and current city code confirm it.
Hotel rental program mechanics
Many condo-hotels require you to enroll in the hotel’s rental program for part or all of the year outside owner use. The revenue split depends on how the operator defines gross versus net revenue. Typical deductions include a management fee, marketing and distribution costs, housekeeping, booking commissions, utilities and an FF&E reserve for furniture and equipment. Owner statements should show how each deduction is applied. The headline nightly rate and occupancy do not equal your net cash flow without careful review of all fees.
Financing in Miami Beach
Traditional condos
Many Miami Beach condos can qualify for conventional financing if the project meets lender guidelines. Lenders look at owner-occupancy ratios, reserves, delinquency levels and investor concentration. When a building is warrantable, buyers often secure standard down payments and rates.
Condo-hotels
Condo-hotels are often considered non-warrantable by conventional lenders because of hotel operations. That means fewer financing options, larger down payments and stricter underwriting. Conforming or FHA loans are typically not available. Cash purchases and portfolio loans from lenders familiar with condo-hotels are common.
Your action plan
- Speak early with a mortgage broker who has condo-hotel experience in Miami Beach.
- Ask for project-specific pre-approval so you know down payment, rates and conditions before you go under contract.
- Build a financing contingency that addresses condo-hotel eligibility if you plan to borrow.
Taxes, fees and insurance
Transient and tourist taxes
Condo-hotels usually operate under hotel tax rules. Transient occupancy taxes, tourist development taxes and sales tax can apply to short stays. Many hotel operators collect and remit these taxes for you, but you should confirm in writing how taxes are handled and who is responsible for filings.
Property taxes and classification
Property taxes can vary based on how a unit is used. Units operated as part of a hotel may be assessed differently than an owner-occupied residence. Review Miami-Dade Property Appraiser records for similar units and confirm how your intended use may affect assessment.
Insurance and assessments
Both property types have a master association policy, and you carry interior coverage. Condo-hotels often have higher premiums due to guest use and added liability. Clarify what the master policy covers, how deductibles work and whether you share in hotel-related costs or FF&E reserves. Ask how guest-related incidents affect owner assessments.
Income, valuation and resale
Understanding net income
If you are evaluating a condo-hotel for income, request several years of owner statements for the specific unit. Review occupancy, average daily rate and all deductions to estimate net cash flow. Use multiple years to smooth out spikes from events or renovations. Your yield depends on net, not on a high nightly rate.
Liquidity and buyer pool
Condo-hotels tend to have a narrower resale market because financing is limited and some buyers prefer not to follow hotel rules. Traditional condos attract a broader mix of end users and long-term investors. A broader buyer pool can support liquidity when you sell.
Seasonality and events
Miami Beach is seasonal and event driven. Winter is the high season and major events like Art Basel can lift demand, rates and occupancy. Your income projections should reflect seasonality, event windows and the operator’s yield management.
Documents to review before you commit
- Recorded condo declaration, bylaws, house rules and all amendments.
- Hotel management agreement and any brand or franchise agreement, including terms for renewal, replacement and termination.
- Owner rental program rules and the owner agreement template.
- Three years of unit-level owner revenue statements and hotel financials, plus any third-party occupancy and ADR data used by management.
- Current and historical association budgets, audited financials if available, and the most recent reserve study.
- Minutes of board meetings for the last 12 to 24 months and notices of any special assessments or litigation.
- Master insurance certificates and a summary of required owner coverage.
- Property Appraiser records for assessed value and tax history.
- Required municipal licenses for transient rentals and proof of current compliance.
- Evidence of building and safety compliance, permits for hotel operations and certificates of occupancy.
- Sample booking statements and documentation of how occupancy and sales taxes are collected and remitted.
Professionals to engage: a Florida real estate attorney with condominium and hospitality experience, a CPA who understands Florida hospitality taxes, a mortgage broker experienced in condo-hotels and a local broker with direct sales history in South Beach or Mid-Beach projects.
Smart negotiation points
- Owner booking rights, guaranteed owner weeks and any blackout dates in writing.
- Caps or limits on increases to management fees, FF&E reserves and program charges.
- Clear audit rights so you can verify owner revenue statements and accounting.
- Transfer terms for management and brand agreements, including approval rights and fees when you sell.
- Procedures for special assessments related to hotel operations and when owner approval is required.
- Remedies if the operator fails to meet service or reporting standards.
Which option fits your goals
Choose a condo-hotel if you value:
- Hotel-level services with housekeeping, front desk and brand marketing.
- Turnkey rental distribution with centralized reservations and loyalty channels.
- A hospitality experience where service standards are enforced.
Choose a traditional condo if you value:
- Control over use, privacy and furnishing choices.
- Broader financing options and potentially lower down payments.
- A wider buyer pool on resale and fewer operational constraints.
If you want hotel services with potential rental income, a condo-hotel can work, provided you accept program rules and carefully model net cash flow. If you want control, flexible financing and broad resale demand, a traditional condo is often the cleaner path.
Work with a local expert
Your best outcome starts with clear priorities and meticulous review of the project documents. You deserve design-forward guidance, transparent modeling and strong negotiation. If you are weighing South Beach versus Mid-Beach or condo versus condo-hotel, let’s talk through your goals and create a plan that fits. Connect with Elaine Kauffmann’s team at elainekauffmann.com for tailored advice and a private search.
FAQs
What is the main difference between a condo and a condo-hotel in Miami Beach?
- A condo is a residence governed by an association, while a condo-hotel is a condo unit inside a hotel operation with a management agreement, hotel services and rental program rules.
How do owner-use limits work in Miami Beach condo-hotels?
- Most condo-hotels set a maximum number of owner nights and may include blackout dates; owner stays usually require advance booking and follow hotel priority rules.
Can I get a conventional mortgage on a condo-hotel unit in Miami Beach?
- Many condo-hotels are non-warrantable, which limits conventional financing; buyers often use cash or portfolio loans from lenders familiar with condo-hotels.
Who handles occupancy and tourist taxes for condo-hotel rentals?
- Operators often collect and remit transient and related taxes, but you should confirm in your owner agreement who files, who pays and how taxes appear on owner statements.
What fees reduce my condo-hotel rental income in Miami Beach?
- Common deductions include management fees, marketing and distribution costs, booking commissions, housekeeping, utilities and FF&E reserve contributions.
How does resale liquidity compare between condos and condo-hotels?
- Traditional condos generally attract a wider buyer pool and may sell more easily, while condo-hotels face a narrower market due to financing limits and program rules.
What documents should I review before buying a condo-hotel?
- Review the condo declaration, hotel management and franchise agreements, rental program rules, several years of owner statements, association budgets, reserve study, board minutes and insurance summaries.
