Condo Hotels in Miami: A Profitable Investment for Foreign Buyers?

Investing in real estate in Miami has long been a popular strategy among international investors, particularly those seeking dollar-denominated returns and portfolio diversification. In this context, the condo hotel model has gained traction as a unique opportunity that combines real property ownership with short-term rental income from the city’s thriving tourism market.

But does it still represent a profitable investment in 2025 and beyond? In this article, we take a closer look at how condo hotels work, the key benefits they offer to non-resident investors in the U.S., the main tax implications to consider, and which areas of Miami show the highest demand for this type of property.

>> Read Frequently Asked Questions

What Is a Condo Hotel and How Does It Work?

A condo hotel is a privately owned unit located within a hotel-managed building. Unlike a traditional apartment, this type of property allows individual investors to generate rental income when they’re not using the unit, as it is managed by the same company that operates the hotel.

This hybrid model combines the benefits of personal use with the financial returns of short-term tourist rentals. It’s an attractive option for foreign investors who want to own real estate in Miami without the burden of daily property management.

Why Invest in a Miami Condo Hotel in 2025?

Interest in Miami condo hotels has resurged in 2025 for several strategic reasons:

1. Strong tourism demand: Miami remains one of the most visited cities in the United States. In 2024 alone, it welcomed over 26 million visitors, with a robust recovery in international tourism driving consistent occupancy rates.
2. Potential for dollar-based returns: Nightly rental rates in premium areas like Brickell and South Beach offer high yield potential, especially when the unit is professionally managed and competitively positioned.
3. Prime locations: Condo hotels are typically located in high-value, central areas with easy access to transportation, retail, and beachfront, making them attractive both to tourists and real estate investors.
4. Legal and financial stability: The United States continues to offer a transparent and secure regulatory environment, which is essential for foreign investors seeking predictable returns and long-term asset protection.

Key Advantages for Foreign Investors

For Latin American residents and other international buyers seeking asset diversification and passive income, investing in a Miami condo hotel can be a strategic choice. Some of the most relevant benefits include:

• Hands-off rental income: The unit is professionally managed by the hotel operator, eliminating the need to hire staff or coordinate with rental agencies.
• Optimized occupancy rates: As part of an established hotel brand, condo hotels often benefit from year-round occupancy and strong marketing strategies.
• Dollar-denominated property: Real estate in the U.S. provides a hedge against currency fluctuations, especially valuable for investors coming from more volatile economies.
• Remote purchasing made easy: Many condo hotel projects allow for remote acquisition through legal structures such as Limited Liability Companies (LLCs), streamlining the buying process for non-residents.

Tax and Legal Considerations for Foreign Buyers

Proper tax planning is critical when investing in a condo hotel as a non-U.S. resident. Here are some key aspects to keep in mind:

1. Forming an LLC: Holding the property through a U.S.-based LLC helps protect personal assets, simplifies remote purchases, and may optimize your tax position.
2. Federal and state taxation: Rental income is subject to U.S. federal income tax, and depending on the property's location, may also be subject to state or local taxes.
3. FIRPTA Withholding: Without adequate planning, rental income or capital gains from a future sale may be subject to a 30% withholding under the Foreign Investment in Real Property Tax Act (FIRPTA).
4. Annual tax filings: All foreign owners must file annual tax returns with the IRS, even if the property did not generate income during the year.

Working with professionals who specialize in U.S. tax law and international real estate is essential to avoid costly mistakes and take full advantage of the available tax benefits for non-resident investors.

Top Areas for Condo Hotels in Miami (2025–2026)

Location is one of the most important factors influencing the profitability of a condo hotel investment. In 2025 and 2026, the most in-demand areas include:

Brickell: Miami’s financial district continues to attract both business travelers and leisure tourists, offering strong occupancy rates and premium pricing.

South Beach: A top destination for leisure tourism, this area enjoys year-round hotel demand thanks to its beaches, nightlife, and iconic Art Deco architecture.

Downtown Miami: A rapidly developing hub with new luxury projects, cultural attractions, and proximity to major sports venues and event centers.

Sunny Isles Beach: A favorite among Latin American investors, known for its oceanfront properties and partnerships with high-end hotel brands.

Each neighborhood offers unique characteristics in terms of guest profile, average daily rates (ADR), and maintenance costs. Evaluating these factors is essential when selecting the most suitable condo hotel project for your investment goals.

What to Consider Before Investing in a Condo Hotel

Before moving forward with this type of investment, it's essential to evaluate several key factors:

Contract terms: Each hotel operator sets specific rules regarding owner usage, revenue sharing percentages, and shared operational costs. Review the management agreement carefully.

Maintenance fees: These typically include property management, insurance, housekeeping services, capital reserves, and building improvements. Understanding the full cost structure is critical to calculating net returns.

Usage restrictions: In many cases, owners can only use their units for a limited number of days per year, depending on the operator’s policies and hotel occupancy goals.

Market outlook: Analyze local tourism trends, competition in the area, and the long-term sustainability of the project before making a purchase decision.

Frequently Asked Questions

How much does it cost to invest in a condo hotel in Miami?

Prices typically range from USD 300,000 to over USD 1.5 million, depending on the location, unit size, and hotel brand associated with the property.

What kind of ROI can I expect in 2025?

The average net return on investment (ROI) is between 5% and 7% annually, although this can fluctuate depending on occupancy rates and seasonal trends. Be cautious of promoters advertising significantly higher returns.

Can I purchase a condo hotel unit from abroad?

Yes. Most developers offer remote purchasing options through a U.S.-based LLC (Limited Liability Company). Contracts can be signed electronically, and legal guidance is typically available for foreign buyers.

What taxes will I have to pay as a non-resident?

Rental income is subject to federal income tax, and in some cases, withholding may apply if your investment is not properly structured. Working with a professional tax advisor is essential to ensure compliance and avoid unnecessary liabilities.

How do we assist you?

At H&CO, we specialize in assisting international investors with every aspect, from tax planning to smooth property acquisition. Contact us today to secure your investment and maximize your returns.