Thinking about buying in Miami Beach but not sure whether a traditional condo or a condo-hotel fits your goals? You are not alone. Both options can work well here, yet they differ in financing, rental flexibility, taxes, and resale. This guide breaks down the key tradeoffs so you can move forward with confidence and a clear plan. Let’s dive in.
Condo vs condo-hotel basics
A traditional condo is an individually owned residential unit within a building governed by an association. You own the unit and an interest in shared spaces. Your ability to rent depends on the condominium declaration and the HOA’s rules.
A condo-hotel is a condo that operates as part of a working hotel. A hotel operator runs bookings, front desk, housekeeping, and marketing. Owners often join a rental program and may have limited personal use based on the management agreement.
In Miami Beach, visitor demand is strong. That makes both short-term rental condos and condo-hotels attractive to investors. At the same time, local rules can be strict about short-term rentals, and many HOAs add their own limits. Understanding these differences is essential before you buy.
Financing: what changes the math
Traditional condos often qualify for conventional loans if the building meets program rules. Some also qualify for FHA or VA loans. Lenders review condo projects for owner-occupancy ratios, reserves, delinquencies, commercial space, and single-entity ownership before approving loans.
Condo-hotels are different. Because of hotel operations, rental pooling, brand agreements, and commercial components, many condo-hotel projects do not meet standard agency guidelines. Financing is usually through portfolio lenders or specialty programs with larger down payments and less favorable terms.
Typical outcomes to expect
- Traditional condos: Potential access to conforming loans if the project is eligible, and sometimes FHA or VA. Lender project reviews still apply.
- Condo-hotels: Often require 15–30% down or more, portfolio or jumbo loans, and higher rates. Lenders may not count projected hotel rental income for qualifying unless using specific programs.
What lenders will review
- Project eligibility for agency programs
- HOA financials, reserves, and delinquencies
- Ownership concentration and any commercial space
- For condo-hotels: historical occupancy, ADR, RevPAR, and owner payout statements
- Rental and management agreements, including fee splits and owner use rules
If you want maximum financing flexibility, prioritize projects that meet conventional condo eligibility. If you are targeting a condo-hotel for income, plan for higher cash requirements and tighter underwriting.
Rentals and management: how you earn
With a traditional condo, your rental options depend on HOA rules and the building’s declaration. Some allow only long-term leases. Some allow short stays. Others prohibit short-term rentals. If permitted, you or your manager handle marketing, bookings, cleaning, guest communication, and tax collection.
In a condo-hotel, a professional operator handles bookings, housekeeping, front desk, and marketing. Owners usually receive a share of gross or net room revenue after fees. Owner use is often limited, with blackout periods and a set number of personal nights.
Pros and cons at a glance
- Condo pros: More control over your rental approach, potential for lower operating costs, easier personal occupancy.
- Condo cons: If short stays are restricted, income potential is capped; you or your manager must run the operation.
- Condo-hotel pros: Turnkey marketing and operations, brand distribution can support occupancy, simpler guest services.
- Condo-hotel cons: Fee splits reduce net income, owner use is limited, and you have less control over pricing and policies.
Taxes, licensing, and rules in Miami Beach
Short-term rental income is taxable. Net rental income is generally reported on your tax return. Personal use rules can affect your deductions. For guidance, review IRS resources on residential rental property and depreciation and speak with your tax professional.
Short-term stays in Florida usually trigger sales and tourist taxes. In Miami Beach, transient rental taxes and local registrations may apply. Who collects and remits taxes depends on how bookings are handled. A condo-hotel operator usually manages these tasks. If you self-list a condo, you or your property manager may be responsible.
Local enforcement in Miami Beach is known to be strict compared to many other Florida areas. Zoning, licensing, and building rules can limit or prohibit short-term rentals in certain zones or buildings. Always verify current city, county, and HOA requirements before you buy.
Resale, liquidity, and risk
Traditional condos usually have a larger buyer pool that includes primary residents, second-home buyers, and long-term investors. Financing is more widely available when projects meet agency standards. This tends to support liquidity and helps with resale.
Condo-hotels often appeal mostly to investors comfortable with hotel operations. The buyer pool can be smaller and more sensitive to revenue trends and management agreements. Financing constraints can also limit the number of qualified buyers.
Key risks to watch
- Financing ineligibility that narrows the buyer pool
- Long-term management or franchise terms that reduce owner flexibility
- Revenue volatility tied to seasonality and travel trends
- HOA reserve shortfalls or special assessments
- Regulatory changes affecting short-term rentals
- Brand or operator changes that impact performance and perception
Quick decision guide
Choose a traditional condo if you want:
- Broader financing options and potentially lower rates
- Flexibility to live in the unit without restrictions
- Control over your rental strategy, if allowed by HOA and city rules
Choose a condo-hotel if you want:
- Turnkey operations with professional marketing and guest services
- Potential for high occupancy driven by a hotel brand and distribution
- A simplified owner experience with limited personal use
Due diligence checklist
Before you write an offer, ask for:
- Condo declaration, bylaws, and amendments, with rental rules highlighted
- HOA budget, reserve study, financials, and meeting minutes
- Project eligibility status for Fannie, Freddie, FHA, or VA
- For condo-hotels: hotel management and franchise agreements
- Historical unit or building revenue, owner payout statements, and fee schedules
- Insurance master policy and required owner coverage
- City and county licensing or permits for short-term rentals, if applicable
- Property condition reports and any capital improvement plans
- Any developer control periods, transfer restrictions, or litigation disclosures
Work with a local guide
Your best choice depends on your goals, timeline, and financing plan. If you want hands-on control and broader financing, a traditional condo can be the right fit. If you prefer a turnkey experience with centralized operations and are comfortable with investor-style financing, a condo-hotel may make sense.
Ready to compare specific buildings in Miami Beach and greater Miami-Dade? Let’s talk about your use plan, budget, and target returns, then build a shortlist and run the numbers. Connect with Jon Gilman for a friendly, data-informed consultation.
FAQs
What is the main difference between a Miami Beach condo and a condo-hotel?
- A condo is a residential unit with HOA-governed rental rules, while a condo-hotel operates as part of a hotel with centralized bookings, services, and often limited owner use.
How does financing differ for condo-hotels in Miami Beach?
- Many condo-hotels do not meet conventional loan guidelines, so buyers often use portfolio or jumbo loans with larger down payments and higher rates than standard condos.
Are short-term rentals allowed in all Miami Beach condos?
- No. Many buildings limit or prohibit short-term rentals, and city rules can be strict. You must confirm both HOA restrictions and local licensing requirements.
Can projected rental income help me qualify for a condo-hotel mortgage?
- Often not with conventional programs. Some specialty lenders may consider income history, but many do not underwrite to projected hotel revenue.
What fees reduce my income in a condo-hotel rental program?
- Typical deductions include management, housekeeping, marketing, central reservation, franchise, and utility allocations outlined in the management agreement.
What documents should I review before buying a Miami Beach condo-hotel?
- The hotel management agreement, franchise terms, historical occupancy and payout statements, HOA financials, and any project eligibility letters or lender reviews.
How do resale prospects compare between condos and condo-hotels?
- Condos usually have a wider buyer pool and lender acceptance. Condo-hotels attract mainly investors and can face longer days on market tied to revenue and financing limits.
