Ever wondered if you can own a place in Miami Beach that doubles as a hotel when you are not there? You are not alone. Condo-hotels promise personal vacation time plus potential rental income, but the rules, costs, and financing are different than a typical condo. In this guide, you will learn what a condo-hotel is, how Miami Beach regulations and taxes affect you, what owners usually pay and receive, how financing works, and exactly what to review before you commit. Let’s dive in.
What a condo-hotel really is
A condo-hotel is a condominium where individual units are sold to owners, yet the building operates like a hotel for transient guests. When you are not using your unit, it is commonly placed in a rental pool and marketed as a hotel room. You receive a share of revenue after fees and taxes.
This model differs from a residential condo in key ways. The use is geared to short-term stays rather than long-term residence. Many projects require or strongly encourage participation in an on-site rental program. Hotel-level services like front desk, housekeeping, and centralized reservations change the cost structure. Commercial elements, such as franchise or management agreements, also shape owner obligations.
Common models include full rental-pool programs, optional rental participation, and hybrid approaches that allow a mix of longer rentals during certain months. Most condo-hotels also limit owner-use days, set booking priorities, or include blackout periods. You will find these details in the condo documents and the rental program agreement.
Miami Beach rules you must know
Who regulates condo-hotels
Condo-hotels in Miami Beach sit at the intersection of several authorities. Florida condominium law sets governance rules. Miami-Dade County and the City of Miami Beach regulate transient rentals, licensing, enforcement, and taxes. Federal flood rules apply in coastal zones. Each layer matters for your rights, costs, and financing.
Short-term rental zoning and permits
Miami Beach has active transient occupancy rules and strict enforcement. Some buildings operate under hotel zoning with specific approvals, while others are residential condos with rental programs. The difference impacts how many rental nights are allowed, what permits are required, and how the city enforces violations. Confirm whether the building has hotel status, is properly registered, and whether it is grandfathered under older approvals.
Occupancy and sales taxes on stays
Short-term stays in Miami Beach are typically subject to transient occupancy and sales taxes at the state, county, and city levels. In true hotel models, the operator usually collects and remits these taxes. They reduce the gross-to-net conversion on your rental income, so they should appear clearly in any pro forma or historical statements you review.
Insurance and flood considerations
Miami Beach is high flood-risk coastal. Lenders will require flood coverage for properties in FEMA-designated Special Flood Hazard Areas. Associations generally carry master property and liability policies. You may need your own HO-6 policy and, depending on lender requirements and master policy terms, separate coverage for contents or flood. Premiums can be volatile, so confirm coverage and how costs are allocated to unit owners.
Franchise, management, and vendor contracts
Many condo-hotels operate with hotel brand franchises and long-term management agreements. These contracts can include brand standards, marketing fees, capital expenditure requirements, and termination provisions. They directly influence your operating costs and resale appeal. Request and review these agreements before you buy.
How ownership and rental programs work
Agreements that shape cash flow
Your net returns depend on several documents:
- Management agreement: operator fees, booking procedures, maintenance standards, owner revenue share, and housekeeping or service charges.
- Rental program agreement: whether participation is mandatory or optional, minimum stays, owner-use allotment, unit setup rules, and reservation priority.
- Franchise agreement: brand and marketing fees, plus capital upgrades required to maintain standards.
- HOA budgets and reserves: operating budget, reserve funding level, and history of special assessments.
Typical fees and recurring costs
Expect condo-hotel costs to differ from residential condos. Common categories include:
- HOA assessments: often higher than residential condos due to front desk, guest services, housekeeping support, and hotel-level utilities.
- Management and rental fees: operators often collect a significant share of revenue. Owner splits commonly reflect the operator taking 25 to 50 percent of gross room revenue, plus possible booking or marketing fees.
- Franchise fees: brand-related marketing and royalty fees are usually deducted before owner distributions.
- Occupancy and sales taxes: applied to transient stays and remitted by the operator, which lowers net income.
- Insurance and utilities: association coverage, potential unit-level allocations, and contributions to reserves for major systems.
These costs vary by building. Always compare the pro forma against historical statements and the current HOA budget.
Revenue drivers and seasonality
Miami Beach is a global destination with pronounced seasonality. Peak winter months often produce higher occupancy and average daily rates. Lower summer demand can reduce revenue. Even modest changes in occupancy or ADR can meaningfully shift your net returns. Ask for seasonally detailed data and sensitivity analysis.
Performance transparency
Professional operators and brand-affiliated projects often provide historical monthly revenue, occupancy, ADR, and booking-source data. Request unit-level statements whenever available. Confirm whether financials are audited and whether the reports reconcile to association budgets and the rental program’s fee structure.
Financing a condo-hotel in Miami Beach
Warrantability reality
Many condo-hotel projects do not meet the eligibility rules for conventional conforming loans. They often fail warrantability tests due to transient use, commercial space, rental program provisions, or operator control. FHA and VA programs have even stricter project criteria and typically exclude condo-hotels. If you require conforming financing or low down payments, a residential condo may be a better fit.
What lenders usually require
Financing is available through specialized portfolio lenders, local banks with in-house programs, and private lenders. Expect higher equity requirements. Down payments in the 25 to 50 percent range are common, and interest rates are often higher than standard conventional loans. Lenders underwrite conservatively, relying on audited historicals, project-level reviews, and stress-tested income assumptions.
Appraisals and cross-border buyers
Appraisals in this asset class require hotel and condo-hotel expertise. Valuation may consider income metrics such as occupancy, ADR, and revenue per available room, along with comparable sales. Many lenders will finance foreign nationals with larger down payments and stricter documentation. If you are a nonresident, plan for tax withholding considerations on sale and coordinate early with your tax advisor.
Due diligence checklist
A disciplined review helps you avoid surprises and align the asset with your goals. Use this checklist to guide requests and conversations.
Project-level documents
- Declaration of condominium, amendments, bylaws, and rules and regulations
- Management agreement and any hotel franchise or brand agreements
- Rental program agreement, including owner-use rules and booking procedures
- HOA budgets and financials, reserve study, and history of special assessments
- Master insurance policies, including flood coverage, and allocation methods
- Minutes of recent board meetings and any notices of claims or litigation
- Capital improvement plan and details of upcoming or recent assessments
- Project-level occupancy, ADR, and RevPAR reports for 12 to 36 months
- Unit-level historical revenue statements, if available
- Certificate of occupancy, zoning approvals, and transient occupancy permits
Transaction-level documents
- Unit title report, easements, liens, or encumbrances
- Seller’s pro forma plus relevant tax returns tied to the unit’s rental activity
- A reconciled pro forma that itemizes fees, taxes, housekeeping, utilities, HOA, insurance, and reserves
People to involve
- Florida real estate attorney with condo and hospitality experience
- Lender or mortgage broker experienced in condo-hotel financing
- CPA familiar with rental income and nonresident tax rules
- Hotel operator or brand representative to explain revenue-sharing and marketing
- Hospitality appraiser for income-based valuation support
- Title company and, as needed, local permitting or code compliance specialists
Decision framework: condo-hotel vs residential condo
A condo-hotel can make sense if you want part-time use, professional management, and potential income without hands-on operations, and if the project has transparent, audited performance with a favorable owner split. A residential condo may suit you better if you want stable long-term occupancy, lower HOA fees, and access to conforming loan programs.
Red flags to watch
- Mandatory rental pool with a high operator take that limits your personal use
- Lack of audited or unit-level revenue history and thin occupancy or ADR data
- Long-term brand or management contracts that require costly upgrades
- Association weakness such as low reserves, frequent special assessments, or litigation
- Non-warrantable status that eliminates conventional or government-backed financing
- Unclear zoning, permits, or transient occupancy approvals
What a strong pro forma should show
- Monthly gross room revenue with seasonal detail
- Occupancy and sales taxes deducted from gross receipts
- Management and rental fees, broken out by base and incentive components
- Franchise or brand fees and any central reservation charges
- Housekeeping and turnover costs per stay
- Utilities and common area allocations
- HOA assessments, including reserve contributions
- Insurance allocations from master policies
- Net operating income to the owner in dollars and as a percentage
- Sensitivity tests showing impact of a 10 to 20 percent change in occupancy or ADR
Next steps to evaluate opportunities
- Step 1: Clarify your objectives and financing constraints. Define owner-use days, acceptable management models, and whether you will buy with cash or finance.
- Step 2: Request complete project and program documents from the listing side. Ask for condo documents, management and franchise agreements, association financials, and detailed historical revenue reports.
- Step 3: Share the materials with your lender, attorney, and CPA to confirm financability, legal obligations, and tax treatment, and to validate the pro forma assumptions.
- Step 4: Obtain an independent hospitality appraisal and, where possible, market comp reports to benchmark occupancy and ADR.
- Step 5: Negotiate contract contingencies for financing, condo document review, and approval of the management and rental agreements.
If you want a curated list of vetted Miami Beach condo-hotel buildings and sample pro formas that match your goals, our team can help coordinate documents, lender feedback, and an apples-to-apples comparison so you can move quickly and confidently. For discreet guidance from acquisition through ownership and management, connect with Brosda and Bentley Realtors.
FAQs
What is the difference between a Miami Beach condo-hotel and a residential condo?
- A condo-hotel is built for transient stays with hotel operations and rental pools, while a residential condo is designed for long-term living with fewer hotel-style services and restrictions.
Are Miami Beach condo-hotel units eligible for conventional loans?
- Many condo-hotels are non-warrantable, which means conventional conforming, FHA, and VA loans often are not available and specialized portfolio financing or cash is common.
How do short-term occupancy taxes affect condo-hotel owners in Miami Beach?
- Transient occupancy and sales taxes are typically deducted from gross receipts on each stay, which lowers your net income and should be reflected in pro formas.
What insurance do I need for a Miami Beach condo-hotel unit?
- The association usually carries master policies, but you may need an HO-6 and possibly flood coverage depending on lender requirements and master policy terms.
How many days can I personally use my condo-hotel unit each year?
- Owner-use limits vary by building and rental program, so review the condominium documents and rental agreement for calendars, blackout periods, and booking rules.
Which documents should I review before buying a condo-hotel in Miami Beach?
- Request the condo declaration, rental and management agreements, franchise contracts, HOA budgets and reserves, insurance policies, historical revenue reports, and zoning or permit records.
