Guide to Buying a Condo Hotel (Condotel) in Miami - FAQs and More

Guide to Buying a Condo Hotel (Condotel) in Miami - FAQs and More

Jan 02, 2019 January 02, 2019

Miami has been the playground of choice for beach lovers, party goers and tourists in general for ages. The constant demand from people wanting to live and play here makes Miami a natural pick for the concept of condo hotels. Almost every major hospitality brand out there either has one or is in the process of putting a new condo hotel in the city. But, what is a condo hotel? What makes it a good investment? Why would anyone choose a condo hotel over a traditional condo or a timeshare? Find answers to such frequently asked questions and more below in our complete guide to buying a condo hotel in Miami. For a list of condo hotels in Miami and Miami Beach, please CLICK HERE.

Quick Links

Acqualina Ocean Residences
Acqualina Ocean Residences

What is a Condo Hotel and How Does it Work?

Condo hotels are typically high-rises operated by hotel brands. These are generally built close to popular vacation destinations. The condo-hotel units are reserved for sale to individuals who would like to own them as a second home or vacation property, and owners then have the option to place their condo in the hotel’s rental program to earn a revenue while they’re away.

Perhaps the best part of buying a unit in a condo hotel is that the owner inherits all of the 5-star amenities, services and luxuries associated with the hotel brand. Typical amenities include signature spa services, fine dining, nightclubs, lounges, lavish pools, room service, concierge desk and housekeeping.

To the average guest, a condo hotel unit might seem no different than a regular hotel suite, but the key difference is that it is individually owned.

Condo Hotels: One Residence, Many Names

A condo hotel goes by many names. It is mostly known as a condominium hotel, hotel condo, and of course, condo hotel in the U.S. Internationally such residences are popularly known as condotels.

Advantages of Owning a Condo Hotel Vs. Traditional Vacation Condo

Before delving into the details of buying or owning a condo hotel, let’s take a look at the various advantages a condotel owner gets by default:

Hassle-free vacation home with signature hotel amenities. One of the biggest attractions of buying a condo hotel suite as a vacation home is getting access to all the facilities of a full service resort. While housekeeping, room service and a concierge take care of things during your stay, the hotel team or an on-site management company can take over once you’re away.

Hospitality-grade, professional managed rental program. Another great advantage of being part of a brand is that if you put your suite in the hotel’s rental program, you have a professional team with years of sales and marketing experience in the hospitality sector working to your advantage. Not only does your suite get the advantage of a professionally managed marketing team, but also a multi-million-dollar global reservation system keeping your suite in the limelight and generating revenue all year long. This, of course, comes with the hotel getting a share of your revenue.

On the other hand, in case you decide not to use the hotel’s rental program and prefer hiring a third-party management company to do an airbnb for example, you then get to keep a bigger share of the revenue while still enjoying all the leverages and benefits associated with the hotel’s brand.

Income known to offset ownership expenses. Just like a regular vacation condo, a hotel condo too comes with its own set of expenses like monthly fees, maintenance and repairs, short term rental taxes, etc. However, with the hotel’s rental program looking to generate a regular stream of income, many are able to offset the cost of ownership and even book profits on their suite.

Two-fold appreciation. Any kind of property is known to be an appreciable asset. One unique advantage to a condo hotel is that if the image of the hotel brand improves over time that can increase your property rental rates and possibly your property value.

Icon Brickell III (W Miami)
Icon Brickell III (W Miami)

Difference between a Timeshare and Condo Hotel

No joint ownership. Unlike a timeshare, wherein several owners get to use the same property as a vacation home, a hotel condo is individually owned.

No fixed time for vacation. Since you do not share ownership of your condotel suite, the concept of time sharing is also ruled out. In a timeshare, co-owners usually agree upon the amount of vacation time they can have on the property, which is typically the same 1-2 weeks a year. However, in a condo-hotel since you are the sole owner of your suite, you get to decide the number of days and times a year you could use your vacation condo (this, is of course, after due consultation with the hotel on blackout dates, if you are enrolled in the hotel rental program).

Easier to resell. The concept of sharing ownership and splitting time with others in itself can be a turn off for many buyers. However, since a condo hotel suite is individually owned, it is has a higher probability of appreciating over time and is easier to resell.

Is a Condo Hotel the Right Choice for Me?

If you answer yes to the following, then a condotel would be the right choice for you:

  • You only plan on using it as a vacation property
  • You only plan on visiting for a small percentage of the year
  • You like the idea of owning a slice of luxury in a world-class hotel brand
  • Earning rental income while not using it is a priority

Is Buying a Condo Hotel a Good Investment?

Just like any other investment vehicle, whether this turns out to be a smart pick or not actually depends on your needs and choices. Here are a few elements that impact your return on investment:

  • Not all hotel brands are built the same. Your revenue directly depends on your hotel condo’s brand image and management. The stronger the brand value and management, the more you can expect to earn per night. This means it becomes extremely important to choose the right brand in accordance with your investment capability.
  • Revenue splits. If you chose to enroll in the hotel’s rental program, keep in mind that you will be splitting revenues with the establishment. This means you could pocket anywhere between 35-60 percent of the earnings, depending on which condo-hotel you choose. However, a 35% cut from a well-established, high-end brand could end up giving you better annual returns than a 60% cut from a weaker brand.
  • Projected data limitations. Since developers are only allowed to sell condo hotels as real estate and not investments (according to the Securities and Exchange Commission), you will not be given any data on occupancy forecasts, proposed rates or expected rate of returns for pre-construction projects. However, existing properties can share historical data about earnings, which can give you a fair idea of what to expect.
  • No guarantees on occupancy rates or income. Again, since the SEC restricts sharing any kind of projected data, no realtor or developer will commit to any kind of income or rate estimates. Also, your condo hotel earnings will be just as vulnerable to economic or political climate change as the rest of the hospitality industry. So, the only thing one can do to safeguard their investment is to look into the checklist below and ensure a good buy.

 Mondrian
Mondrian - Photo credit: Ken Hayden Photography

How to Ensure your Condo Hotel is a Successful Buy?

Once you’ve decided that a condo hotel is the right choice for you, then do look into the following checklist to ensure that it turns out to be a smart buy as well:

  • Good location. Make sure your condo-hotel sits in or near a popular vacation destination or at least in a neighborhood frequented by tourists.
  • Strong brand. Brand value is one of the most basic things that will help ensure better marketing, higher occupancy rates and earnings per night.
  • Attractive amenities. What’s a hotel without its amenities, right? Make sure that the amenities are at par with what you spend. After all, spending more than a million-dollars should fetch ultra-luxury amenities in a 5-star establishment.
  • Solid management. Even the most enticing amenities can turn lackluster without the proper care and maintenance. A solid management should make sure that your suite and the hotel is always in tip-top condition.
  • Survey around. Make sure you check out neighboring properties, condo hotels in different parts of the city, the unit itself (if it’s ready), prices of similar condo hotels, etc. before taking a final call.
  • Read the fine print. Make sure you know about your association’s fees and rules, any restrictions, details on the rental program, it’s blackout dates and revenue splits. An informed decision is the best decision.
  • Ask a lot of questions, especially if it’s your first. This is the only time you have to ask as many questions as you want and clear every doubt you may have. Once you sign the dotted line, there’s little that can be done after.

Key Questions to Ask Before Buying A Condo Hotel

  • How does the hotel’s rental program work?
  • Is it mandatory for you to participate in the hotel’s rental program?
  • How are rental revenues split? What percentage do you get?
  • How long before you come to stay will you have to notify management?
  • Are there any blackout dates? (Blackout dates are generally peak vacation times or holidays when your suite is compulsorily blocked for renting out.)
  • Is there any restriction on the number of days you can stay/rent out your suite?
  • Will you have to stick to the check-in/check-out timing too?
  • Is your unit furnished? Is the current furniture in the unit acceptable if you want to place it in the hotel program?
  • Who will manage the property? (The hotel team and management team can be two separate entities.)
  • When are proceeds distributed?
  • How much access will you have to the hotel’s amenities?
  • What are your voting rights and how much access will you have to property books and records?
  • What if a guest damages the furniture in your suite?
  • Can you use the hotel facilities even when not occupying your suite?
  • Who is responsible for paying the property tax on your suite?
  • Can the condo hotel be financed?

Staying in the Hotel’s Rental Program Vs. Managing Without One

Joining the hotel’s rental program

  • You have an experienced sales team, an expert in the field of hospitality, marketing your suite all year long.
  • The hotel’s worldwide, multi-million-dollar reservation system is used to market, manage and track rentals. The outreach of such programs is usually immense.
  • Besides the hotel’s brand image and marketing techniques, your suite will be listed on the website and sophisticated apps posted by the hotel, making your room more visible and accessible.
  • You will have to split a fixed percentage of the revenue with the hotel, which may or may not match your investment goals.
  • Blackout dates can be a concern, especially when you wish to spend major holidays or peak vacation weeks in your vacation suite.

Going solo (i.e. Airbnb)

  • You can either dedicate your extra time or hire a third party to manage your rentals. We’ll be happy to advise you about some of the best property management companies in Miami to make your search easier.
  • You get to keep a lot more of your revenues. If you are not in the hotel rental program, you are typically not required to share your revenues with the hotel.
  • You or the company you hire need to be dedicated towards the proper marketing and management of your rentals to generate a steady flow of income.
  • You have full control over when you do and do not want to rent out your unit.

Ritz Carlton Bal Harbour
Ritz Carlton Bal Harbour

Typical Expenses for a Condo-Hotel Owner

Just like a regular condo, your condotel suite entails a monthly association fee that generally covers utilities such as gas, water, electricity, internet, cable TV; common area maintenance; reserves for furniture repair; accrual of future expenses such as room remodeling; management costs; building insurance; and other expenses generally covered by traditional condo fees.

Additionally, you will be responsible for paying insurance (there will be details in the official documents on specifics), real estate taxes and any other unique expenses detailed in the agreement with the hotel operator.

The hotel will be responsible for paying for its costs of operation such as salaries, marketing, reservation systems and other direct hotel expenses.

Can a Condo Hotel be Financed?

Yes, plenty of lenders are willing to finance condo hotel units nowadays. However, what’s worth noting is that since banks perceive these units as an investment property rather than a residential property, loan rates and down payment requirements are generally higher. Another reason for higher rates is that lenders assume a greater risk of financing an investment property versus a primary residence, as in, they believe an individual is more likely to default on a payment for an investment residence as opposed to a permanent residence.

Alternatives to Condo-Hotels for Short Term Rentals

Some looking for condo-hotels ultimately simply want to have a vacation condo they can rent out whenever they are not using it. Many condos in Miami and Miami Beach allow for either daily, monthly or seasonal rentals, which can offer a practical alternative to condo-hotels.

To make it easier for you, we put together a list of condos in the Miami and Miami Beach area that allow short term rentals for you.

Conclusion

All in all, condo hotels are a great way to enjoy a fabulous property, located in some of the top tourist destinations of the world, powered by a world-renowned hospitality brand. It also works out to be a great investment opportunity, where the rental income mostly ends up covering regular expenses and still leaves room for profits.

Miami has a huge variety of condo hotels and we’ll be more than happy to pair you with the best fit. Feel free to give us a call at 786-930-4220 or email us at contact@condoblackbook.com to help you with your search for the best condo hotel, or browse through below to get started.

W South Beach
W South Beach

A List of Condo Hotels in Miami

Condo NameAddressNeighborhoodCityZip CodeProperty TypeRental PolicyYear builtPrice RangesArea (sq ft)
1 Hotel & Homes102 24th StSouth BeachMiami Beach33139Condo-HotelDaily, only hotel program2014$1,170,000 - $5,950,000866-2,200
1818 Meridian House1818 Meridian AveSouth BeachMiami Beach33139Condo-Hotel1956$199,000-​$370,000357-816
ABAE (1215 on West)1215 West AveSouth BeachMiami Beach33139Condo-HotelDaily, only hotel program2016299,000-425,000442-504
Alden Hotel Condo2925 Indian Creek DrMid-BeachMiami Beach33140Condo-Hotel2004189,900-​189,900288
Bentley Beach Hilton101 Ocean DrSouth BeachMiami Beach33139Condo-HotelDaily2004$665,000 - $1,090,000515-640
Boulan220 21st StSouth BeachMiami Beach33139Condo-Hotel2010$769,000-​$769,0001025
Carillon Resort and Condo (Center Tower)6801 Collins AveNorth BeachMiami Beach33141Condo-HotelDaily ok2010$425,000 - $1,950,000662-1,285
Carlyle Deco Hotel1250 Ocean DrSouth BeachMiami Beach33139Condo-HotelDaily ok1941$749,999-$​772,5001,046-1,387
Casa Grande834 Ocean DrSouth BeachMiami Beach33139Condo-Hotel1923contact us
Casablanca6345 Collins AveNorth BeachMiami Beach33141Condo-HotelDaily ok1948$190,500 - $239,000320-350
Congress Hotel - Strand Condo1024-1060 Ocean DrSouth BeachMiami Beach33139Condo-HotelNo restrictions2005$379,000 - $720,000451-729
Conrad Mayfield1395 Brickell AveBrickellMiami33131Condo-Hotel2008$280,000 - $1,549,000729-2,082
David William700 Biltmore WayCoral GablesCoral Gables33134Condo-Hotel1963$149,000 - $432,600420-1,086
Empire Condo750 Collins AveSouth BeachMiami Beach33139Condo-HotelDailycontact us
Faena Hotel Residences3201 Collins AveMid-BeachMiami Beach33140Condo-HotelDaily okcontact us
Fontainebleau II Tresor4441 Collins AveMid-BeachMiami Beach33140Condo-Hotel2008$669,000 - $3,200,000491-1,557
Fontainebleau III Sorrento4391 Collins AveMid-BeachMiami Beach33140Condo-Hotel2008$632,000 - $7,900,000521-3,300
Fortune House 185 Southeast 14th TerraceBrickellMiami33131Condo-HotelDaily ok1998$239,000 - $410,000640-950
Fountainebleau 4441 Collins AveMid BeachMiami Beach33140Condo-HotelDaily?2008669,000-​3,200,000491-1,557
Four Seasons Residences Brickell1435 Brickell AveBrickellMiami33131Condo-HotelDaily ok2013329,000-​25,000,000611-8,803
Icon Brickell III (W Miami)485 Brickell AveBrickellMiami33131Condo-HotelNo restrictions2011$345,000 - $780,000495-1,459
M Resort Residences18683 Collins AveSunny Isles BeachSunny Isles Beach33160Condo-HotelDaily2005$384,900 - $1,050,000688-1,497
Marenas Beach Resort18683 Collins AveSunny Isles BeachSunny Isles Beach33160Condo-HotelDaily2005$380,000-​$1,050,000688-1,497
Mondrian1100 West AveSouth BeachMiami Beach33139Condo-HotelDaily ok2008$3,000 - $870,000477-1,190
Mutiny Park2889 McFarlane RdCoconut GroveCoconut Grove33133Condo-HotelDaily ok2001$440,000 - $799,000686-1,183
Newport Beachside16701 Collins AveSunny Isles BeachSunny Isles Beach33160Condo-Hotel1966$22,500-​$22,500360
Ocean Manor4040 Galt Ocean DrFort LauderdaleFort LauderdaleCondo-HotelDaily ok (condo-hotel)contact us
Ocean Point Beach Club17375 Collins AveSunny Isles BeachSunny Isles Beach33160Condo-HotelDaily if in hotel program, or if not in hotel program, then 3 months (6 months max), 3 times a year2001$344,900 - $1,250,000930-1,900
Ocean Spray4130 Collins AveMid-BeachMiami Beach33140Condo-Hotel1936$167,000-​$249,000214-269
Okan Tower555 N. Miami AveDowntownMiami33136Condo-HotelDaily2021contact us
Olsen Hotel Condo7300 Ocean TerraceNorth BeachMiami Beach33141Condo-Hotel1940contact us
One Hotel & Homes102 24th StSouth BeachMiami Beach33140Condo-HotelDaily20141,170,000-​8,900,000866-3,278
Q Club (Hilton)505 N Fort Lauderdale Beach BlvdFort LauderdaleFort LauderdaleCondo-HotelDaily ok (condo-hotel)contact us
Ritz Carlton Bal Harbour10295 Collins AveBal HarbourBal Harbour33154Condo-Hotel2008$495,000 - $5,900,000510-3,317
Ritz Carlton Coconut Grove3300, 3340, 3350 and 3400 SW 27 AveCoconut GroveCoconut Grove33133Condo-Hotel2001$465,000 - $1,850,000936-4,000
Setai2001 Collins AveSouth BeachMiami Beach33139Condo-HotelDaily2005$1,499,000 - $8,300,000767-2,558
Shelbourne1801 Collins AveSouth BeachMiami Beach33139Condo-HotelDaily?1940$375,000 - $1,200,000220-940
Sole17315 ColinsSunny Isles BeachSunny Isles Beach33160Condo-HotelDaily ok (condo-hotel)2007279,000-​1,100,000644-1,201
St Regis Center Tower9703 Collins AveBal HarbourBal Harbour33154Condo-Hotel30 day minimum (the north and south towers are 6 months, just FYI)20122,175,000-​10,950,0001,261-3,912
The Alexander5225 Collins AveMid BeachMiami Beach33140Condo-Hotel30 day minimum, 12x1962$439,000 - $950,000960-1,490
The Mutiny2951 S. Bayshore DrCoconut GroveCoconut Grove33133Condo-hotelDaily ok1998$299,000-595,000620-960
The Surf Club Four Seasons9011-9111 Collins AveSurfsideSurfside33154Condo-hotel2016$3,725,000 - $15,995,0002,024-5,822
Trump International18001 Collins AveSunny Isles BeachSunny Isles Beach33160Condo-Hoteldaily ok2013$260,900 - $1,595,000457-1,478
W Hotel South Beach2201 Collins AveSouth BeachMiami Beach33139Condo-HotelDaily ok2009$915,000-​12,500,000490-2,960
Waldorf Astoria300 Biscayne BlvdDowntownMiami33132Condo-hotelDaily ok2020contact us
YotelPad227 NE 2nd StDowntownMiami33132Condo-HotelDaily ok2020contact us
Z Ocean Hotel 1437 CollinsSouth BeachMiami Beach33139Condo-HotelNo restrictions2007$309,000-445,000500
Contact Sep Niakan
Founder, Condoblackbook.com & Owner/Broker, HB Roswell Realty
(786) 930-4220
contact@condoblackbook.com
Request Info
By sending you agree to CondoBlackBook's Terms of Use

Recent Posts

The average Miami Preconstruction Condo buyer lost 14% in resales through Q3 2019
Real Estate News The average Miami Preconstruction Condo buyer lost 14% in resales through Q3 2019
This year, CondoBlackBook.com again teamed up with HB Roswell Realty to analyze the latest new construction resale data across Miami. We tracked new condo units built between 2017 and 2019 in Miami’s urban core and beach areas that have since been sold by the original owner in the first three quarters of 2019. What we found builds upon last year’s report and is surprising—most sellers lost money. On average, Miami new construction condo resales lost around 13.9% when factoring in costs (1.7% at purchase and 6.8% at sale).*  This follows our analysis conducted over the same period last year in which we found sellers lost 11% on average. Our team analyzed 116 new construction resales in Greater Downtown Miami, Coconut Grove, Miami Beaches and the surrounding islands (except Fisher Island and Key Biscayne) that closed in 2019 and found that 40 broke even or made a profit, while 76 resales lost money—nearly 65% of the owners in our study (compared to a similar figure of 63% in last...
Coral Gables and Coconut Grove Luxury Condo Market Report -- Q3 2019
Real Estate News Coral Gables and Coconut Grove Luxury Condo Market Report -- Q3 2019
The latest from CondoBlackBook.com’s Q3 2019 report for luxury condos in Miami shows some slight shifts from the previous quarter -- while overall sales and the median sales price increased, the median price per square foot dropped and a sustained inventory surplus means we’re still in a buyer’s market. This report breaks down how the combined Coral Gables and Coconut Grove fared in the third quarter. For the purpose of this luxury condo market report, we’ve only featured properties priced $1 million and above. Coral Gables and Coconut Grove Luxury Condo Market Q3 2019 Highlights: Sales slightly short of last year’s outstanding performance Positive sales trendline, showing sustained market momentum Price per sq. ft. is lower compared to Q3 2018 Overall inventory drops significantly Coral Gables and Coconut Grove Luxury Condo Market Summary - Fig. 1 Slight Slip in Overall Luxury Condo Sales YoY sales decline marginally, but are higher than 2017, 2016 and 2015 with positive...
Miami’s New and Pre-Construction Condo Update: October 2019
Real Estate News Miami’s New and Pre-Construction Condo Update: October 2019
Supertalls took over pre-construction news this Halloween month. The tallest in the city – Okan Tower won construction approvals. The fourth tallest in Miami, Brickell Flatiron celebrated its completion milestone. The Turnberry Ocean Club, one of the tallest on the Atlantic Coast, topped off. And, the tallest in Edgewater, Missoni Baia snagged a $243 million construction loan. Read on for details on these and other condo pre-construction updates for the month of October below:  Completed Brickell Flatiron - Brickell At 736 feet above ground, Brickell Flatiron now stands complete. It is the fourth tallest building in Miami, just behind Panorama Tower (868 feet above ground), Four Seasons (around 800 feet), and the Southeast Financial Center (764 feet). With closings beginning shortly, 95% of the tower is already sold out. The 64-story skyscraper is home to 527 ultra-luxury condo residences, offering high-end amenities such as a sky pool with lounge, rooftop gym and spa, urban...
Miami Beach Luxury Condo Market Report Q3 2019
Real Estate News Miami Beach Luxury Condo Market Report Q3 2019
In our overall Miami luxury condo market report for Q3 2019, we saw an increase in sales, a decline in median prices, and heavy inventory keeping things in favor of the buyer. This report breaks down how the neighborhoods in Miami Beach and the barrier islands reacted over the quarter individually, as well as against the market as a whole. For the purpose of this report, we’ve included the sub-neighborhoods of South Beach, Mid-Beach, Sunny Isles Beach, Surfside, and Bal Harbour as part of this Miami Beach grouping. Also, this luxury condo market report only features properties priced $1 million and above. Miami Beach Market at a Glance Miami Beach Luxury Condo Market Q3 2019 Highlights: Miami Beach sales almost match Q3 2018 Sales trendline positive for all neighborhoods Year-over-year sales improve in South Beach, Surfside & Bal Harbour  Miami Beach price per sq. ft. is same as Q3 last year Surfside & Bal Harbour report highest jump in quarter-over-quarter...
The Most Luxurious Condo Buildings in Coconut Grove
Real Estate News The Most Luxurious Condo Buildings in Coconut Grove
Coconut Grove is not just about rich foliage, but is also home to quite a few luxury condo residences. To get a taste of this historic neighborhood plus its plush properties, we’ve enlisted the 5 Most Expensive Condo Buildings in Coconut Grove and bonus pre-constructions that set the bar high for phenomenal living in the city. Why Choose Coconut Grove? Coconut Grove Main Highway. Photo courtesy of MiamiAndBeaches.com The partly coastal neighborhood of Coconut Grove is characterized by lush, tropical foliage and a relaxed Bohemian vibe. Its bouquet of rare boutiques, unique shops, colorful cafés, diverse restaurants, historical venues, lush parks, and easy access to water sports plus a nautical lifestyle make it a breezy neighborhood to live in. The Best of the Best Condos in Coconut Grove  Ritz-Carlton Coconut Grove – 3300, 3340, 3350 and 3400 SW 27th Avenue, Coconut Grove Avg. sales price $624 per sq ftBacked by the world-famous hospitality brand, this waterfront...
The Most Luxurious Condo Buildings in Brickell
Real Estate News The Most Luxurious Condo Buildings in Brickell
The Most Luxurious Condo Buildings in Brickell Brickell is where the business is – so it doesn’t come as a huge surprise that the neighborhood would house some of the finest residences to cater to a wide array of residents, spanning from globetrotting professionals to business moguls plus their families. Curious about the kind of high-end residences available for such global citizens? We’ve ranked the 5 most expensive, thus luxurious, condo buildings in Brickell below: Why Choose Brickell? Brickell is not only the second-largest banking hub in the States, but also home to several consulates, businesses and a majority of the offices in Miami. It is also serviced by all major public transportation systems in the city, giving it one of the highest transit scores of 98. It further ranks second on our most walkable neighborhoods in Miami study, with a near-perfect walkscore of 98, meaning most hotspots and conveniences can easily be reached on foot. In recent times, this financial...