What Is a Condo Hotel? Miami Beach Buyer Guide

Thinking about a condo hotel in Miami Beach but not sure how it really works? You want a turnkey place to enjoy, plus the potential for rental income when you are away. The model can be attractive, yet the details matter more than in a typical condo purchase. In this guide, you will learn how condo hotels operate, what financing and taxes look like, and the exact due diligence to do before you write an offer. Let’s dive in.

What a condo hotel is

A condo hotel is a hotel operated by a professional manager where individual units are sold to private owners as deeded condos. Your unit may enter a rental program that markets it to guests when you are not using it. You benefit from hotel services while also holding real property with recorded title.

The building is governed by condominium documents, and it also runs under a hotel management agreement. That means association rules and fees apply, along with hotel operating policies, transient occupancy rules, and brand standards.

How operations work

Two structures run side by side:

• Condominium governance. The association handles common areas, building insurance, reserves, assessments, and building rules.
• Hotel management. A brand or operator runs front desk, housekeeping, marketing, reservations, and pricing. The operator charges management and brand fees, then allocates revenue to participating owners based on the rental agreement.

Hotels focus on short-term stays. Expect more guest turnover, more wear and tear, and hotel-level operating costs. The trade-off is convenience, amenities, and professional booking systems.

Rental programs and payouts

Every building is different, so read the rental agreement closely. Key items to review:

• Enrollment. Is participation mandatory or optional? If optional, can you opt in later?
• Revenue split. Are payouts a percentage of gross revenue or net after deductions? Confirm what gets deducted first, such as taxes, credit card fees, housekeeping, utilities, marketing, and brand fees.
• Management and brand fees. Identify percentages and any minimums.
• Owner reserves and capital costs. Determine if you must contribute to reserves or periodic refreshes.
• Owner use. Clarify how many days you can occupy each year, how to reserve, and blackout dates.

Units are usually sold furnished or require a standard furniture package. You are often required to maintain hotel-standard decor and condition.

Owner use and restrictions

Most condo hotels cap owner use each year. Common ranges are 30 to 90 days, but limits vary. The operator typically controls pricing and inventory, so you do not set nightly rates or approve guest bookings.

Some buildings restrict long-term leases to preserve hotel operations. If you want extended personal occupancy or private long-term tenants, confirm the rules in the declaration and rental agreement.

Expect owner-use calendars, minimum notice for reservations, and penalties for exceeding limits. Ask for written policies before you commit.

Governance and documents to review

Condo hotel governance has more moving parts than a standard condo. Be sure you understand who controls what.

• Association vs operator. The association manages the building, while the hotel operator runs daily hotel functions under a separate management agreement. That agreement can affect your costs, owner rights, and termination options.
• Concentrated ownership. If a developer or single investor holds many units, they can influence decisions. Consider how this may affect budgets, rules, and resale.
• Assessments and litigation. Operational shortfalls or major repairs can trigger special assessments. Review meeting minutes, budgets, reserve studies, and any pending claims or litigation.

Financing basics for condo hotels

Financing a condo hotel is different from a standard condo. Many projects are considered non-warrantable by conventional programs. That can steer you to portfolio or commercial-style loans with higher down payments and potentially higher rates.

Before you shop, speak with lenders who actively finance condo hotels in Miami Beach. Ask about:

• Minimum down payment for investors and owner-occupants.
• Rates, loan terms, and amortization.
• Credit score and debt-to-income requirements.
• Whether the project passes conforming program review or requires portfolio financing.

Prequalify early with a lender that has closed condo hotel loans locally. This sets realistic expectations on budget and timelines.

Tax factors to discuss

If your unit participates in the rental program, you must report rental income. You may be able to deduct certain expenses and depreciate the unit and furnishings subject to rental rules. Your tax treatment depends on personal-use days versus rental use.

Short-term rentals are also subject to state and local occupancy and sales taxes. The operator often collects and remits them, but confirm how taxes appear on owner statements. If you plan to sell an investment-use unit, ask your CPA about eligibility and rules for a like-kind exchange.

Tax rules can be complex. Speak with a CPA experienced in Florida short-term rental and vacation-home taxation before you proceed.

Miami Beach considerations

Miami Beach is a premier leisure market, which shapes both revenue and risk. Keep these local factors in view:

• Licensing and compliance. Miami Beach has defined rules for transient lodging. Condo hotels generally operate with hotel licenses, but verify that the building is properly licensed and compliant. Ask for written confirmation and check for any enforcement history.
• Zoning and legal use. Confirm that the building is permitted to operate as transient lodging and that the condo declaration supports hotel operations.
• Insurance and hazards. Coastal exposure increases insurance costs and deductibles. Review the association’s property and flood coverage, windstorm deductibles, and whether assessments for deductibles are common.
• Flood zone and elevation. Flood zone status can affect lender requirements and costs. Request any available elevation certificate and check the parcel’s flood designation.
• Seasonality. Occupancy and nightly rates swing with tourism and events. Request building-level performance data such as occupancy, average daily rate, and revenue per available room. Ask for month-by-month history.

Step-by-step due diligence

Use this checklist before you write an offer:

1. Gather core documents

• Declaration of Condominium, bylaws, rules, and regulations.
• Hotel management agreement, brand or franchise agreements.
• Rental program agreement and sample owner statements.
• Resale certificate and any owner-use rules or calendars.

2. Review financials

• Current association budget and the most recent audited financials.
• Reserve study and schedule of assessments.
• History of special assessments and arrears.
• Unit-level income statements for 12 to 36 months, including gross revenue, deductions, and net payouts.

3. Confirm operations and performance

• Occupancy, average daily rate, and RevPAR history for the building.
• Revenue allocation methodology and fee structure.
• Blackout dates, minimum stays, and lead time for owner bookings.
• Refurbishment cycles, who pays, and the required standards.

4. Verify legal and compliance items

• Evidence of hotel or business licenses for the property.
• Confirmation of compliance with Miami Beach transient accommodations rules.
• Any open code enforcement issues, liens, or litigation.

5. Assess physical condition and insurance

• Any available building inspection reports and recent capital projects.
• Summary of master insurance coverages, limits, and wind deductibles.
• Flood zone information and any available elevation certificate.

6. Align financing and tax planning

• Prequalify with a lender that finances Miami Beach condo hotels.
• Review project warrantability with the lender if seeking conforming options.
• Consult a CPA on rental income reporting, personal-use thresholds, depreciation, and occupancy taxes.

Pros and cons at a glance

Pros

• Resort-style amenities with housekeeping, concierge, and on-site management.
• Potential rental income without daily landlord duties.
• Deeded real property in a high-demand tourist market.

Cons

• Limited owner use and limited control over rates and bookings.
• Higher HOA, hotel, and brand fees, plus potential capital assessments.
• Financing limits that may require higher down payments.
• Added tax complexity and local transient occupancy rules.
• Coastal insurance exposure and related costs.

Is a condo hotel right for you?

A condo hotel can be a smart fit if you want a Miami Beach pied-à-terre with hotel services and the chance to offset costs through managed rentals. It can also make sense if you prefer professional operations over hands-on hosting and do not need full-time use. The model is less ideal if you want maximum control over pricing, frequent personal occupancy, or the lowest possible carrying costs.

Focus on the project’s rules, the rental math after all fees, and the building’s financial health. Ask for real performance data and review all agreements with your professional team before you sign.

Ready to explore Miami Beach condo hotel options with a trusted local advisor? Reach out to Tatsiana Hladkaya, PA for curated guidance, property selection, and support from contract to close.

FAQs

What is a condo hotel in Miami Beach?

• A condo hotel is a deeded condo unit inside a hotel that you can use personally and, when not in use, place into a hotel-run rental program that markets it to short-term guests.

How does owner income work in a condo hotel?

• The hotel operator collects guest revenue, deducts defined expenses and fees as outlined in the rental agreement, and pays the owner a share based on the contract’s allocation formula.

What owner-use limits should I expect in Miami Beach condo hotels?

• Many buildings cap owner use to a set number of days per year and set blackout dates, with reservations managed by the operator; confirm limits in the declaration and rental agreement.

Why is condo hotel financing different from regular condos?

• Many condo hotels are non-warrantable under conventional guidelines, so buyers often use portfolio loans with higher down payments, different terms, and lender-specific criteria.

What taxes apply to condo hotel rentals in Miami Beach?

• Rental income is reportable on your tax return, and short stays are generally subject to local occupancy and sales taxes; confirm how the operator collects and remits them.

What local checks are essential before buying a condo hotel unit?

• Verify hotel licensing and compliance, review association insurance and wind deductibles, confirm flood zone status, and request building performance metrics and owner statements.

What documents should I review before making an offer?

• Obtain the condo declaration and rules, hotel management and rental agreements, association budget and reserves, unit income statements, insurance summaries, and any litigation disclosures.