With Miami's hospitality and Airbnb-approved condo towers selling out, more buyers are walking into the wrong building. Here's the buyer framework I use.
Key Takeaways
- Not every Miami condo-hotel is built to make you money — many are built to make the operator money
- The four red flags I check first: rental program lock-ins, operator splits, unit-mix economics, and exit liquidity
- Hospitality-branded condo towers in Miami paid down $115M in construction loans last week as units near sellout
If you've watched Miami real estate over the last 18 months, you've seen the trend: developers are building condo towers that look like hotels, function like hotels, and are marketed almost entirely on rental income potential. Some are spectacular investments. Some are quietly built to enrich the operator far more than the owner. The buyers who can tell the difference are getting wealthy. The buyers who can't are sitting on units that don't cash flow and won't resell.
I've now closed enough condo-hotel transactions in Miami to know the patterns. This is the framework I use with every client considering a Miami condo-hotel purchase, whether it's a $500K studio in DUOS Wynwood, a $700K one-bedroom in The Crosby, or a $1.5M unit in a hospitality-branded trophy tower.
What "Condo-Hotel" Actually Means in Miami Right Now
Three terms get used interchangeably and they shouldn't be: condo-hotel, short-term-rental approved condo, and hospitality-branded condo. Each is a different animal.
A true condo-hotel is a building where the developer has secured hotel zoning, the units are designed and operated as a hotel product, and an operator runs the rental program. Owners typically participate in a rental pool with revenue-sharing. The unit is technically your property, but operationally it's part of a hotel.
A short-term-rental approved condo is a residential condo where the building's zoning and association docs allow rentals of less than 30 days. Owners typically self-manage or hire third-party property managers. Think of projects like The Crosby Miami Worldcenter or DUOS Wynwood — designed as residences but with the legal flexibility to run Airbnb income from day one.
A hospitality-branded condo is a residential condo with a hotel brand name attached — St. Regis, Mandarin Oriental, Waldorf Astoria — that may or may not allow short-term rentals. Some brands aggressively prohibit STR; others structure programs that allow it. The brand on the building tells you nothing about whether you can make rental income.
If you're confusing these three categories, you're going to buy the wrong product. The financial structures are completely different.
Red Flag #1: The Rental Program Lock-In
The biggest trap I see Miami buyers walk into is signing into a mandatory rental program with a long lock-in period and unclear exit terms. Some condo-hotel developers structure rental agreements that auto-renew, restrict your ability to use the unit personally for more than a certain number of nights per year, and require expensive buyout fees to exit.
- What to look for in the rental agreement BEFORE you sign:
- Minimum lock-in period (anything beyond 24 months should make you pause)
- Personal use night cap (anything below 30 nights per year is restrictive)
- Renewal terms (does it auto-renew? Can you opt out?)
- Exit fees if you want to remove your unit from the rental program
- Whether you can sell the unit while still inside the program
I've seen Miami buyers thrilled with their projected returns until they realized they couldn't stay in their own unit during high season and couldn't sell without paying a five-figure exit fee. Read the program docs before you sign the reservation, not after.
Red Flag #2: The Operator Revenue Split
The economics of a condo-hotel come down to one calculation: what percentage of gross rental revenue does the owner take home after the operator's cut, the management fee, the marketing fee, the housekeeping pass-through, and the "shared services" line item?
Typical Miami condo-hotel splits in 2026 range from 40% to 65% net to owner after all operator fees. Anything below 40% is unfavorable to the owner. Anything above 65% is uncommon and worth investigating — sometimes it means the operator is charging owners separately for services that should be bundled.
- Watch for:
- Bundled vs. unbundled fees (one clean operator percentage is usually better than a stack of separate fees)
- "Common area maintenance" or "shared services" pass-throughs that aren't capped
- Marketing fees calculated on gross revenue (these compound badly in high-occupancy years)
- Annual unit refresh requirements where the operator charges premium pricing for FF&E
The cleanest condo-hotel deals look like a single operator share, transparent monthly statements, and a capped management fee. The worst look like a tax return.
Red Flag #3: The Unit Mix Economics
This is the one most buyers never think to ask about. In a condo-hotel or STR-approved building, the financial performance of YOUR unit depends heavily on the mix of OTHER unit owners in the building.
If 60% of units are owned by operators who keep them in the rental pool year-round, your unit competes against professional pricing every night. If only 20% are in the rental pool because most are second-homers using personal time, your unit's nightly availability is higher and your booking velocity is better.
- The questions I ask developers:
- What percentage of units have been sold to investors vs. end-users?
- What's the projected percentage of units that will be in the rental program in steady state?
- What's the average ADR and occupancy the operator is projecting?
- What comparable buildings has this operator run, and at what performance?
If the developer can't answer these clearly, you're buying a pro forma and praying. As I covered in "How to Read a Miami Condo Building's Financials Before You Buy," the financial transparency of a building is the single best predictor of how it will perform long term.
Red Flag #4: The Exit Liquidity Question
The last filter I run on every Miami condo-hotel: what does the secondary market look like for resale?
True condo-hotels — especially older ones in places like South Beach and Sunny Isles — often have terrible resale liquidity. Buyers can't get conventional financing on them. The pool of buyers who can write cash for a $700K hotel-style unit is small. Time on market for resales can stretch past 12 months, and discounts to original purchase price are common.
Newer STR-approved residential condos — like The Crosby or DUOS — tend to have better resale liquidity because the units can be financed conventionally and have appeal to both investors and end-users.
Hospitality-branded condos — like St. Regis or Mandarin Oriental — generally have the best resale liquidity because they appeal to luxury primary-residence buyers in addition to investors.
If you're planning to hold for 5+ years and you understand the segment, illiquidity is manageable. If you're buying with an eye on exit in 3 years, illiquidity is the biggest risk you can take.
Miami Market Snapshot — Early June 2026:
- Hospitality-branded and STR-approved condo developers paid down $115M in construction loans late May as units near sellout
- National investor home purchases hit lowest level since 2020 — but Miami's STR-approved segment is moving the opposite direction
- Active STR-friendly preconstruction projects in Miami include DOMUS Brickell Park, Nexo Residences, NoBe Parc, and Parkside Brickell with units below $700K
- Florida homestead exemption expansion heads to November 2026 ballot (does NOT apply to investment properties)
How to Actually Evaluate a Miami Condo-Hotel Investment
When I underwrite one of these for a client, here's the simple back-of-envelope test I run:
Step 1: Take the developer's projected gross rental revenue. Discount it 25% for first-year ramp.
Step 2: Subtract operator share, management fees, and all known pass-throughs. You're now at projected net rental revenue.
Step 3: Subtract HOA, insurance, taxes, and reserve assessments. Florida's condo reserve law, which I covered in detail in "Florida's Condo Reserve Law: What Every Miami Condo Buyer Must Check," changed reserve requirements materially — make sure your underwriting reflects the post-reform number.
Step 4: Compare that net cash flow to your all-in capital — purchase price plus closing plus FF&E plus any reserve cash you need.
Step 5: Ask yourself: would I buy this if rental income were 30% below pro forma for years 2 and 3? If the answer is no, you're over-relying on a developer projection.
That's the math. If it works at conservative assumptions, the deal is real. If it only works at the developer's optimistic numbers, you're buying a story.
Frequently Asked Questions
Q: Can I get a mortgage on a Miami condo-hotel? A: Sometimes. Newer STR-approved residential condos generally qualify for conventional financing because they're zoned residential and the rental flexibility is optional. True condo-hotels and some hospitality-branded buildings are harder to finance and may require non-QM loans or cash. Always confirm financing eligibility with your lender before going under contract.
Q: Are Miami condo-hotels a good investment in 2026? A: The right one in the right building, yes — and inventory is shrinking fast as hospitality and STR-approved towers sell out. The wrong one in the wrong building can be a multi-year illiquid drag. The framework in this article is how I separate them.
Q: How much can I make renting a Miami condo on Airbnb? A: Gross revenue varies wildly by building, location, unit mix, and season. Brickell and downtown STR-approved one-bedrooms in 2026 are pulling roughly $40K–$70K gross annually, with net to owner typically 35–50% of gross after all fees, taxes, and HOA. The buildings designed specifically for STR generally outperform the general-purpose condos used for Airbnb.
Q: What's the difference between a condo-hotel and an STR-approved condo in Miami? A: A condo-hotel is a hotel-zoned building with a mandatory or quasi-mandatory rental program run by an operator. An STR-approved condo is a residentially-zoned building where owners can rent short-term (less than 30 days) on their own. The financial mechanics, financing options, and exit liquidity are very different.
If you're considering a condo-hotel or STR-approved residence in Miami, let's run the math on the specific building before you sign anything. The 30 minutes will save you years.
Partnership Realty / Partnership Realty Inc / +1 (561) 629-0358 / carloscabalerealtor.com
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