For ages, Miami has been the playground of choice for beach lovers, partygoers, wellness seekers and the average tourist. The constant demand from people wanting to live and play here makes Miami a natural pick for an investment property like a condo hotel. These types of properties go by many names; in the U.S., they're mostly known as condominium hotels, hotel condos, and, of course, condo hotels. Internationally, they're popularly known as condotels.

Almost every major hospitality brand either is part of one or is in the process of developing or collaborating on one. But, what is a condo hotel? What makes it a good investment? Why would anyone choose a condo hotel over a traditional condo, a short-term rental condo, or a timeshare? Find answers to such questions and more here in our expert guide to buying a condo hotel in Miami, or jump directly to the list of condo hotels for sale in Miami and Miami Beach.

Precon: 888 Brickell by Dolce & Gabbana (artist rendering)

— What Is a Condo Hotel and How Does It Work?

Condo hotels are typically high-rises built close to popular vacation destinations and operated by hotel brands such as Four Seasons, Ritz-Carlton, St. Regis, and more. In the building, along with the hotel suites are the condo hotel units, which are reserved for individuals who purchase them to own a second home or vacation property. Owners can place their condo in the hotel's rental program to earn revenue while they're away.

The best part of buying a unit in a condo hotel is that you get access to all of the 5-star amenities, services, and luxuries associated with the hotel brand. For example, you can count on enjoying St. Regis' butler services, among many other perks. Typical amenities of these projects include a signature spa, fine dining, nightclubs, lounges, lavish pools, room service, a concierge desk, and housekeeping.

To the average guest, a condo hotel unit might seem no different than a regular hotel suite, but it is individually owned, and often bigger and more like a regular condo floor plan. 

— 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 property as a vacation home is having access to all the facilities of a 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, professionally managed rental program. Another great advantage of being part of a brand is that if you put your condo 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 condo get a professionally managed marketing team, but a multi-million-dollar global reservation system keeps your unit in the limelight generating revenue all year. This, of course, comes with the hotel getting a share of the profits.

On the other hand, if you prefer hiring a third-party management company to do Airbnb, for example, you get to keep a bigger share of the revenue while still enjoying all the leverages and benefits associated with the hotel's brand.

• Income is known to offset ownership expenses. Just like a regular vacation condo, a condo hotel also comes with its own set of expenses (condo association fees, maintenance, repairs, short-term rental taxes, etc.) However, many people can generate a regular stream of income that offsets the costs of ownership and even book profits on their property with the short-term rental capabilities of the unit.
• 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, it can increase your property rental rates and possibly your property value. A pre-construction condo hotel with a private club is also a great investment in the Miami real estate market.
  
  

Precon: Domus Brickell Park (artist rendering)

— What Are the Differences Between a Timeshare and a Condo Hotel?

• No joint ownership. Unlike a timeshare, wherein several owners get to use the same property as a vacation home, a condo-hotel is individually owned.
• No fixed time for vacation. Since you do not share ownership of your condo, the concept of time-sharing is also ruled out. In a timeshare, co-owners usually agree upon the vacation time they can have on the property, which is typically the same 1-2 weeks a year. However, as the sole owner of your condo hotel, you get to decide the number of days and times in a year you can use your vacation condo. If you're enrolled in the hotel rental program, make sure to consult the blackout dates. These are generally peak vacation times or holidays when your condo is compulsorily blocked for renting out.
• Easier to resell. The idea of sharing ownership and splitting time with others can be a turn-off for many buyers. However, since a condo hotel unit is individually owned, it 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 any of the following questions about condo-hotels, then a condo hotel would be the right choice for you:

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

Precon: Visions at Brickell Station (artist rendering)

— 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 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 condo hotel's brand image and management. The stronger the brand value and management, the more you can expect to earn per night. This is why you have to carefully choose the right brand according to your investment capability.
• Revenue splits. If you choose 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, from our long experience in the Miami real estate market, a 35% cut from a well-established, high-end brand could give 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 the 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. And the seller may also be able to provide insight on their returns and use behavior. 
• 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, political, or climate changes 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.

— 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 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, and is ideally walkable to attractions and restaurants.
• Strong brand. Brand value is one of the most basic things that will help ensure better marketing, higher occupancy rates, and earnings per night. For example, the W Hotel & Residences in South Beach or the 1 Hotel & Homes South Beach are both excellent branded and located condo-hotels. Or the first-ever Dolce & Gabbana condo building in Brickell will also be a condo hotel. This luxury pre-construction condo hotel is certainly worth looking into if you are considering a luxury product. There are many other new preconstruction condo hotels in development as well.
• 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 five-star establishment.
• Solid management. Even the most enticing amenities can turn lackluster without the proper care and maintenance. Solid management should make sure that your condo and the hotel itself are always in tip-top condition.
• Survey and Compare. 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 making a final decision. An experienced brokerage or real estate agent can help you with this and should know some of the best options in your target market. Also, in some markets small units perform better, such as studios, 1 and 2 bedroom options, whereas in other markets larger 2 or 3 bedrooms units have higher occupancy rates. 
• Read the fine print. Make sure you know about your association's fees and rules, any restrictions, details on the rental program, its blackout dates, and revenue splits. An informed decision is the best decision.
• Ask a lot of questions, especially if it's your first condo-hotel investment. 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, little can be done after. To prevent such instances, take a look at our list of suggested questions, watch our video on the pros and cons of buying a condo hotel, or contact us to help you with your specific purchase of a Miami condo hotel unit.
  
  

Precon: OKAN Tower (artist rendering)

— 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?
• Is there any restriction on the number of days you can stay/rent out your unit?
• 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 condo?
• Can you use the hotel facilities even when not occupying your residence?
• Who is responsible for paying the property tax on your property?
• Can the condo hotel be financed?

— Staying in the Condo-Hotel's Rental Program Vs. Managing Without One

Perks of joining the hotel's rental program:

• You have an experienced sales team, experts in hospitality, marketing your unit 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 unit will be listed on the website and in 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 condo.

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 to 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 your unit.
  
  

Precon: Waldorf Astoria (artist rendering)

— Typical Expense for a Condo-Hotel Owner

Just like a regular condo, your condotel unit 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, it's worth noting that since banks perceive these units as an investment property rather than a residential property, loan rates and down payment requirements are generally higher. Contact us for more information about lenders who are able to finance such investments in you are considering the Miami or South Florida market.

Precon: E11even Hotel & Residences (artist rendering)

— Alternatives to Condo-Hotels for Short-Term Rentals

Some people 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 and still provide you with rental income. 

— Buying a Condo Hotel Property: 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 covers regular expenses and typically still leaves room for profits.

With the current huge variety of condo hotels in Miami for sale, 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 the list below to get started.

Precon: Legacy Hotel & Residences (artist rendering)

— A List of Condo Hotels in Miami Area

— List of Miami Preconstruction Condo Hotels