Eyeing a beachfront investment you can also enjoy a few weeks a year? In Sunny Isles Beach, condo-hotels promise just that: hands-off rental income with resort-style perks. You want solid numbers, clear rules, and a smooth path from offer to closing. In this guide, you’ll learn how condo-hotels work, what to verify before you buy, how financing and taxes differ, and how to protect your downside in a coastal market. Let’s dive in.
What a condo-hotel really is
A condo-hotel is a condominium that operates like a hotel. You own a private unit, and a professional management company handles reservations, check-in, housekeeping, and marketing. When you are not using the residence, your unit is available to paying guests through the on-site rental program.
This model differs from a standard condo or a typical short-term rental. Many condo-hotels require owners to enroll in the building’s rental program. Service levels are hotel-grade, which can support higher nightly rates but also drive higher operating costs. Units often follow the rules and taxes that apply to transient lodging rather than long-term residences, and lenders may underwrite these properties differently.
Sunny Isles context and demand
Sunny Isles Beach sits on a luxury high-rise corridor between Miami and Fort Lauderdale. The area benefits from international travel, cruise traffic, and year-round tourism. That mix supports consistent short-term lodging demand.
For condo-hotels, that demand can translate into competitive nightly rates and occupancy, especially in branded or amenity-rich buildings. Performance still varies by season, building reputation, unit type, and competition from nearby hotels and condo-hotels. Resale activity can be strong at the high end but tends to be less liquid than primary-residence condos because the buyer pool is more specialized.
How the rental program works
Condo-hotel revenue and costs are structured around hotel-style metrics. Understanding them will help you model returns accurately.
- Gross revenue: driven by average daily rate, occupancy, and seasonality.
- Operating shares and fees: the rental program and association typically take a portion of gross receipts to cover management, housekeeping, marketing, utilities, and brand costs.
- Owner distributions: paid on a schedule, often net of taxes and fees, with reserves held back for repairs or replacements.
- Hidden costs: look for capital assessments, marketing assessments, turnover charges, furnishing replacements, and amenity fees.
Ask to see historical data by unit type, including occupancy, average daily rate, and owner statements. Then build high, base, and low scenarios to understand your break-even occupancy and cash-on-cash return.
Rules, documents, and governance
Florida condominium law governs association rights and responsibilities, while each project’s declaration, bylaws, and rental management agreements define how the hotel operation works. Before you write an offer, request a full document set. Focus on:
- Recorded declaration and bylaws, plus all amendments and house rules.
- Hotel management agreements, including any brand or franchise contracts.
- Current and prior 2–3 years of budgets, audited financials, reserve studies, and meeting minutes.
- Historical rental program performance by unit type and sample owner distribution statements.
- Any pending litigation, open claims, or special assessments.
If participation in the rental program is mandatory, confirm your owner-use rights, black-out dates, required hold periods, management fee structure, expense allocations, and termination rights.
Taxes and local compliance
When a unit is rented on a short-term basis through a condo-hotel program, it is usually treated as transient lodging for tax purposes. That means sales tax and local tourist development taxes can apply, and licensing or registration may be required by county or city agencies.
Clarify who remits these taxes and how they are withheld and reported on your owner statements. For income tax, rental income and depreciation rules apply, and personal use can affect deductions. Work with a CPA who understands short-term lodging and condo-hotel reporting.
Financing realities for condo-hotels
Many conventional lenders view condo-hotels as non-warrantable or commercial in nature. That can narrow loan options and change terms. Expect some combination of higher down payments, portfolio or jumbo products, or all-cash purchases. FHA, VA, and conforming programs may require project-level approvals.
Before you shop, speak with mortgage professionals who have recent condo-hotel experience in Miami-Dade. Ask which lenders are currently closing in your target buildings, what documentation they require, and how they treat rental income in underwriting.
Insurance and coastal risk
Sunny Isles is coastal, so insurance deserves a close look. Most associations carry a master policy that may be structured more like a commercial policy for a hotel operation. You should confirm what the master policy covers and what falls to you, including interior finishes, furnishings, and business liability when the unit is rented.
Pay attention to windstorm and hurricane deductibles. These can be large and may be allocated to owners after a storm event. Review the association’s claims history, deductible levels, flood zone status, and disaster plans. Even if a lender does not require flood insurance, it is prudent to evaluate both NFIP and private-market options.
Sunny Isles performance drivers
Sunny Isles draws steady international and domestic travel, supported by nearby airports and cruise ports. That can create a wide seasonal window for occupancy and demand peaks during holidays, major events, and convention periods across Greater Miami.
In practice, performance depends on building-level execution. Branding, quality of housekeeping, reservation reach, and on-site amenities can influence both nightly rates and repeat guest behavior. Two similar units in different buildings can post very different net returns because of management fees, utility allocations, and refurbishment schedules.
Due diligence checklist
Use this quick list to keep your review on track:
- Association health: current and prior 2–3 years of budgets, audited financials, reserve studies, meeting minutes, and any special assessments.
- Legal framework: full declaration, bylaws, house rules, and all amendments; hotel management and franchise agreements; rental program documents.
- Historical performance: occupancy, average daily rate, RevPAR, sample owner statements by unit type, and distribution schedules.
- Taxes and compliance: who remits transient taxes, how they are withheld and reported, and any required county or city licenses.
- Insurance: master policy summary, wind/hurricane deductibles, flood exposure, claims history, and business interruption provisions.
- Building condition: planned capital projects, inspection reports, and any open litigation.
- Financing: which lenders are currently active in the building and recent deal structures used by buyers.
If any item is missing or unclear, pause and request the documents. Lack of transparency is a red flag.
Red flags to watch
You can avoid surprises by screening for a few common issues:
- Limited or unaudited rental accounting with no third-party verification.
- Low reserves or recent increases in special assessments.
- Long, expensive management contracts with weak owner oversight.
- Active litigation involving the association, developer, or manager.
- High windstorm deductibles that could be allocated to owners after a storm.
These do not end a deal by themselves, but they do change pricing, terms, and risk.
Model the numbers like a pro
Build three scenarios using building-level history and local market data: optimistic, base case, and conservative. In each case, track:
- Occupancy, average daily rate, and RevPAR.
- Net operating income after management fees, housekeeping, utilities, marketing, repairs, and association assessments.
- Cash-on-cash return, cap rate on NOI, and break-even occupancy.
Compare these results to alternatives such as a traditional long-term rental or other condo investments. This helps you decide whether the added complexity of a condo-hotel is worth it for your goals.
Plan your exit up front
Condo-hotels often have a narrower buyer pool than standard condos. Your future buyer is usually an investor or second-home owner who understands hotel operations, and their lender options may be limited. That can affect time on market and negotiation dynamics.
Before you close, ask which buyer profiles have been most active in recent resales, how they financed, and how long similar units took to sell. A clear exit plan will guide your renovation choices, furniture package, and pricing strategy.
How The Baron Agency helps
Condo-hotels reward careful underwriting and strong execution. You want an advisor who can assemble the full picture, from legal documents to insurance and lender fit, then move quickly when the numbers line up. As a founder-led boutique with in-house underwriting and partner capital, we help you verify the details, structure the deal, and keep your closing on schedule.
If you are evaluating a Sunny Isles condo-hotel, we can help you source the right opportunities, review documents, stress-test the model, and navigate financing options suited to this asset class. When timing matters, our capital partners can support accelerated closings to secure the unit you want.
Ready to compare options and run the numbers with confidence? Reach out to The Baron Agency. Let’s connect.
FAQs
What is a condo-hotel in Florida?
- It is a condo unit you own in a building that runs as a hotel, with centralized reservations, housekeeping, and on-site management. Owners often place their unit in the building’s rental program when not using it.
How do condo-hotel fees work in Sunny Isles?
- The rental program and association typically take a share of gross revenue to cover management, housekeeping, marketing, utilities, and brand costs. Review the exact split and all add-on fees in the rental and association documents.
Are condo-hotel units harder to finance than regular condos?
- Often yes. Many lenders treat them as non-warrantable or commercial. Expect more limited product options and different terms. Speak with lenders who recently closed loans in your target buildings.
Who pays hotel and tourist taxes on rental income?
- Short-term rentals usually trigger state and local taxes. Clarify in writing whether the management company withholds and remits these taxes or if you are responsible. Your owner statements should show how taxes are handled.
What insurance do I need as a condo-hotel owner?
- The association carries a master policy, but you may need an HO-6 policy for interior finishes and contents, plus liability coverage for short-term rentals. Review wind and hurricane deductibles and consider flood insurance.
What documents should I review before buying a condo-hotel?
- Request the full condo declaration and bylaws, hotel management agreements, rental program rules, association budgets and reserves, historical rental performance, insurance summaries, and any litigation or special assessments.
Do condo-hotel investments resell easily in Sunny Isles?
- They can resell well to informed buyers, but the pool is narrower than for primary-residence condos. Liquidity depends on management reputation, brand strength, financing availability, and recent performance data.
