Thinking about buying in Miami and wondering whether a condo-hotel or a traditional residential condo fits you best? You are not alone. Each option offers a different mix of lifestyle, flexibility, and financial considerations. In this guide, you will learn how these properties work in Miami, what to expect for use and rental rules, how financing differs, and the due diligence steps that protect you. Let’s dive in.
What a residential condo is
A residential condominium gives you fee simple ownership of your unit plus a share of the common areas. Rules come from the building’s condominium documents and an elected owner board. Your use can be owner-occupied, long-term lease, or rental if the association and local laws allow it. For legal structure and governance basics, review the Florida Condominium Act in the Florida Statutes, Chapter 718.
What a condo-hotel is
A condo-hotel is a condominium inside a building that operates as a hotel. Units may enter a rental program run by the hotel operator, who manages reservations, housekeeping, and guest services. Some programs are optional while others are mandatory. Your revenue share and personal use windows are defined by the rental or management agreement.
Key differences that affect you
Governance and contracts
Both structures use condo documents, but condo-hotels add hotel operating and rental pool agreements that shape daily operations and income. You will want to review any hotel management agreement and rental program contract alongside the declaration and bylaws. These agreements can affect voting rights, fees, and special assessments.
Personal use and rental
Residential condos often allow long-term leasing. Short-term rentals vary by building and municipality. In condo-hotels, the operator typically controls the rental platform and pricing. Owner use can be limited to certain weeks per year or require advance notice, depending on the contract.
Fees and assessments
Condo-hotels usually carry higher recurring costs. Expect standard association dues plus hotel-related fees such as housekeeping, utilities allocations, marketing, and booking commissions. Reserve funding for hotel-level systems can be significant. Review the budget, reserve study, and any history of special assessments.
Taxes and licensing
Short-term stays trigger transient occupancy and sales taxes in Florida. In a condo-hotel, the operator usually collects and remits those taxes, then distributes net proceeds to owners per the agreement. For current tax guidance, start with the Florida Department of Revenue. Also confirm local licensing and registration rules that apply in the municipality where the property sits.
Financing and insurance realities
Warrantability and lenders
Many condo-hotels are considered non-warrantable by major lenders. That can limit access to conventional programs and increase required down payments or rates. Review project eligibility criteria in the Fannie Mae Selling Guide and the Freddie Mac Single-Family Seller Servicer Guide. Be prepared for portfolio lending or cash in some condo-hotel buildings.
Insurance considerations
Hotel operations can make insurance more complex. There are master property and liability policies for the building and separate interior coverage for owners. Confirm coverage limits, deductibles, and whether loss of rental income coverage is available for your unit.
Resale liquidity
Condo-hotels can trade more slowly and show wider price swings. Marketability often depends on the hotel brand, operator performance, occupancy, and transparency of revenue history. Residential condos typically attract a broader financing pool, which can support liquidity.
Miami rules and market context
Short-term rental rules vary
Miami-Dade County and its cities have different regulations for short-term rentals and hotel operations. Before you buy, confirm the applicable municipal code and approvals for transient rentals. Start with the Miami-Dade County and City of Miami sites for permits, codes, and enforcement references.
Seasonality and neighborhoods
Miami’s tourism and event calendar create seasonal revenue patterns. Condo-hotel income can fluctuate by month and by submarket. Areas like South Beach, Brickell, Downtown, Sunny Isles, Coconut Grove, and Edgewater each show different mixes of tourist demand, pricing, and short-term rental acceptance. Request building-level occupancy and ADR history to benchmark performance.
Who tends to choose what
- Choose a residential condo if you want greater control over personal use, broader financing options, and a more traditional ownership experience.
- Choose a condo-hotel if you value turnkey services, on-site management, and a hotel-style guest experience, and you are comfortable with program rules and variable income.
Due diligence checklist
- Documents
- Condominium declaration, bylaws, and articles of incorporation
- Offering documents or prospectus for new projects
- Hotel management agreement and any rental pool agreement
- Purchase contract terms, deposit schedule, cancellation and assignment provisions
- Financials
- Operating budget, reserve study, and recent financial statements
- At least 12 to 36 months of occupancy, ADR, gross revenue, and owner distributions for condo-hotels
- Exact revenue split, fee schedules, payout timing, and required reserves
- Legal and risk
- Insurance policies, coverage limits, and deductibles
- Pending or historical litigation involving the association or developer
- Municipal approvals for hotel operations or short-term rentals, certificate of occupancy
- Property tax assessment history and any special assessments
- Financing
- Confirm if the project is warrantable under conventional guidelines
- Identify realistic lender options and down payment requirements
- If you expect FHA or VA, confirm project eligibility before you proceed
- Lifestyle
- Owner access to amenities and any guest priority rules
- Housekeeping schedules, maintenance programs, and chargebacks
- Noise, privacy, and operating hours for mixed-use or nightlife components
Red flags to review
- Mandatory rental pool participation or strict owner-use limits
- High or opaque management fees, booking commissions, or revenue manager charges
- Thin reserves or a history of large special assessments
- Incomplete or inconsistent revenue history and performance benchmarks
- Project ineligibility for conventional financing with no clear portfolio-lender path
- Ongoing litigation or unresolved building systems issues
- Brand or operator turnover without a clear transition plan
Next steps and resources
- Speak with a mortgage advisor about condo project eligibility and your financing options. Review project rules with the Fannie Mae Selling Guide and Freddie Mac guidance.
- Have a Florida real estate attorney review all governing documents and rental agreements. The Florida Condominium Act is your legal baseline.
- Confirm transient rental taxes and registration needs with the Florida Department of Revenue and your municipality’s site, beginning with Miami-Dade County or the City of Miami.
- If you are new to condo financing or terms, the Consumer Financial Protection Bureau offers helpful mortgage basics.
When you are ready to compare specific buildings and contracts side by side, let a senior advisor guide your review, introductions to lenders, and negotiation strategy. For confidential, white-glove guidance tailored to your goals in Miami and across South Florida, connect with Edward Pitlake to Schedule a Private Consultation.
FAQs
What is the main difference between a condo-hotel and a residential condo in Miami?
- A condo-hotel operates as a hotel with rental programs and hotel services, while a residential condo is governed only by condo documents and typically allows more control over personal use and leasing within association and local rules.
How do financing options differ for condo-hotels vs condos?
- Many condo-hotels are non-warrantable, which limits conventional financing and can require larger down payments or portfolio loans, while many residential condos qualify for broader conventional options.
Are taxes higher for condo-hotel units because of short-term rentals?
- Short-term rentals generally trigger transient occupancy taxes and sales taxes that the operator usually collects and remits before paying owners their share.
Can I live year-round in a condo-hotel unit?
- That depends on the rental program and owner-use rules; some condo-hotels limit personal occupancy windows or require notice for owner stays.
What documents should I review before buying in a condo-hotel?
- At minimum, review the condominium declaration and bylaws, hotel management and rental pool agreements, operating budget and reserves, revenue history, insurance policies, municipal approvals, and any litigation records.