Condo Hotels

A condo-hotel is a condominium unit inside a building that is licensed and operated as a hotel. You take fee-simple title to your unit exactly as you would in a residential condo — it is recorded in your name, you can sell it, finance it, will it, or hold it in an LLC. What differs is everything around the unit: a hotel operator runs the front desk, housekeeping, food and beverage, the spa and the pool deck, and the building is zoned and licensed for stays of any length.

That last point is the whole reason the category exists in Miami. In most of Miami Beach’s residential districts, renting a home or a standard condo for less than six months and a day is prohibited, and the city enforces it with some of the steepest fines in the country. A condo-hotel sits in a zoning district where transient use is permitted by right. It is, for large parts of the beach, the only legal way to own a unit and rent it by the night.

How the rental program works

Most condo-hotels offer an optional rental program run by the operator. You place your unit into inventory, the hotel books it alongside its own rooms, and revenue is split. Splits are commonly quoted somewhere between 50/50 and 65/35 in the owner’s favour — but the split is the least important number in the contract. What matters is what the split is applied to: gross room revenue, or revenue after commissions, channel fees, credit-card fees, and an allocation of housekeeping and front-desk cost. Two buildings quoting the same headline percentage can produce very different owner cheques.

Read for these terms specifically before you sign anything:

• Owner-use nights. Many programs cap how many nights a year you may occupy your own unit, and block out the weeks that actually matter — Art Basel, New Year’s, spring break, Formula 1 weekend.
• Rotation. Is inventory assigned fairly, or does the operator fill its own units first? A rotation clause protects you.
• FF&E reserve. You will be assessed for periodic refurbishment of furniture, fixtures and equipment, on the operator’s schedule, not yours.
• Term and exit. How long are you locked in, and can you leave the program without leaving the building?
• Who pays for what. Utilities, linen, amenity access, and the cost of comping a guest all have to land somewhere.

Financing is the part that surprises people

Condo-hotel units are generally treated as non-warrantable, which means Fannie Mae and Freddie Mac will not buy the loan. Conventional 20%-down financing is usually off the table. In practice buyers use portfolio lenders, foreign-national programs or non-QM products, and should plan for a meaningfully larger down payment and a higher rate than on a comparable residential condo. A significant share of condo-hotel deals in Miami close in cash for exactly this reason.

The same constraint works against you on the way out. A narrower financing pool means a narrower buyer pool, which means condo-hotel units are typically less liquid than residential condos in the same location. Price that in when you underwrite the exit, not after.

Short-term rental rules, by city

Miami-Dade is not one rulebook. Miami Beach prohibits short-term rental in most residential zoning districts and permits it in specific districts and in properties with a valid transient licence — the penalties for getting this wrong run into five figures per violation. The City of Miami, Sunny Isles Beach, Bal Harbour, Surfside and the unincorporated county each set their own rules, and a building’s own declaration and HOA rules can be stricter than the city’s. Confirm the zoning, the building’s licence status and the condo documents before you write an offer — all three have to line up.

Taxes and the real net

Transient rentals in Florida attract state sales tax plus county-level tourist and convention development taxes; in a rental program the operator normally collects and remits these, but the obligation is ultimately tied to the property. Separately, a unit that is not your homestead does not receive the homestead exemption or the Save Our Homes assessment cap, so your property tax base resets on sale and rises with market value.

Build your pro forma from net operating income after the split, HOA and hotel assessments, FF&E reserve, property tax, insurance, and an honest occupancy assumption — not from an ADR figure and a hoped-for occupancy rate. Ask the operator for two or three years of actual owner statements for a unit of your line and stack. If they will not produce them, that is your answer.

Building health after Surfside

Florida now requires milestone structural inspections and structural integrity reserve studies for condominium buildings, and boards can no longer waive reserve funding indefinitely. Condo-hotels are not exempt. Before you buy, ask for the milestone inspection report, the reserve study, the current reserve balance, the last three years of board minutes, and any assessments voted or contemplated. In a hotel-operated building, also ask who is responsible for capital repairs to the commercial components — the split between residential and commercial elements is where disputes start.

Who this is actually right for

A condo-hotel works well for a buyer who wants a staffed, branded place in Miami they can use several weeks a year and have earn something the rest of the time, who is buying substantially with cash, and who values turnkey ownership over maximum yield. It works poorly for a buyer underwriting it purely as an income asset against a mortgage, or one who expects to control the rental themselves. If nightly income is the goal and control matters, a condo in a building that permits short-term rental under its own rules — what the market calls an Airbnb-friendly building — is usually the better instrument.

I have sold in these buildings since 2002 and I will tell you plainly when the numbers do not work. Get in touch and I will send you the actual owner statements and the reserve position for any building on this list.

Miami condo-hotel buildings we track

33 buildings