Thinking about renting out a Miami Beach condo and torn between short-term stays and a long-term lease? You are not alone. The choice affects your cash flow, workload, financing options, insurance, and even which buildings you can buy in. In this guide, you will learn how each strategy performs in Miami Beach, what rules and costs matter most, and how to choose the right path for your goals. Let’s dive in.
Miami Beach rental basics
Miami Beach is a year-round destination with strong winter and event-driven demand. Short-term stays often peak from late fall through spring and around major events, while summer can be softer outside of specific weekends. Annual leasing is steadier, driven by local jobs and year-round residents who want stability.
Your building’s rules and the city’s regulations are the first filters. Some condominiums allow short-term rentals with permits; many do not. Others cap how many units can rent or require minimum lease lengths. Bold reminder: Always verify your building’s governing documents and current City of Miami Beach regulations.
Short-term rentals: how they work
Short-term rentals can produce strong gross revenue in high season, especially near high-profile areas and event venues. That upside comes with more volatility and a bigger operational lift. You will need a plan for management, cleaning, supplies, guest communications, and compliance.
Revenue and occupancy patterns
- Expect higher nightly rates and occupancy in winter and during major events.
- Summer often slows, so plan for variable cash flow across the year.
- Performance varies by neighborhood, building amenities, and listing quality.
Operating costs and management needs
Short-term rentals carry higher expenses and time demands.
- Management and booking fees can run about 20 to 35 percent for full service. Hybrid and self-manage options exist but require time and systems.
- Turnovers add cleaning, laundry, consumables, and frequent maintenance.
- You will likely cover utilities, internet, and cable. Furnishing and décor are upfront costs.
- Platform and payment fees reduce net income.
Regulations and permits
Miami Beach regulates transient rentals. Requirements typically include registration or permits, business tax steps, and occupancy limits. Miami-Dade County and the State of Florida also require the collection and remittance of tourist and sales taxes on short stays. Rules change over time and enforcement is active. Always verify your building’s governing documents and current City of Miami Beach regulations.
Insurance and lending considerations
Standard condo HO-6 policies usually exclude business use. For short-term rentals, you will likely need a short-term rental endorsement or a commercial or landlord policy, plus ample liability coverage. Lenders often classify STR-heavy use as investment property with higher rates, bigger down payments, or stricter underwriting. Some lenders avoid buildings with widespread short-term rentals.
Long-term rentals: what to expect
Annual leases deliver predictable income with lower management intensity. You will trade peak-season upside for stability and fewer operational headaches. For many buildings, long-term leasing is the default or only permitted option.
Income stability and tenant duration
- Leases are typically 6 to 12 months or longer.
- Steady monthly rent reduces exposure to seasonal dips.
- Lower vacancy risk when you place qualified tenants.
Costs and workload
- Property management fees are generally lower than STR management, often around 8 to 12 percent.
- Fewer turnovers and deep cleans compared with frequent guest stays.
- Tenants often pay some or all utilities, depending on lease terms.
Regulatory and financing
Long-term rentals usually face fewer local enforcement issues than STRs, though association rules still apply. Financing and insurance are typically more straightforward than for a unit used as a short-term rental, but the condo may still be considered investment property. Buildings with high investor or rental concentration can face lender program limits.
Neighborhood fit examples
Miami Beach is not one-size-fits-all. Results vary by submarket and proximity to lifestyle anchors.
- South Beach: Close to beaches, nightlife, the Convention Center, and Lincoln Road. Event-driven demand is strong, but buildings often have stricter rental rules. STRs can work where permitted and well managed.
- Mid-Beach: Amenity-rich resorts and residential towers line Collins Avenue. Some buildings focus on owner occupancy and longer minimum lease terms.
- North Beach: A more residential feel in many pockets, with buildings that commonly lean toward longer minimum lease terms. Short-term options are building-specific.
Your choice lives or dies by permission and enforcement. Before you model returns, confirm that the building and city allow your plan.
Pros and cons at a glance
Short-term rentals
- Pros:
- Higher potential gross revenue during high season and events
- Flexibility to use the unit between bookings
- Strong demand in prime tourist locations when rules allow
- Cons:
- Higher operating costs and frequent turnover
- Seasonal income volatility and vacancy risk
- Regulatory exposure from city and association rules
- More complex insurance and financing
Long-term rentals
- Pros:
- Stable, predictable monthly cash flow
- Lower turnover costs and management workload
- Generally easier to finance and insure than STR use
- Lower city enforcement risk compared with STRs
- Cons:
- Lower gross income than peak STR months
- Tenant issues can arise, including nonpayment and enforcement
- Less flexibility for personal use
Taxes and recordkeeping
Short-term rental income is generally subject to state sales tax and local tourist development taxes. Owners are responsible for registering and remitting taxes, even if a platform helps collect them. At the federal level, rental income is taxable; you can typically deduct items like mortgage interest, property taxes, depreciation, insurance, and operating expenses. For mixed personal and rental use or services beyond a typical rental, consult a CPA. For general IRS guidance, review IRS Publication 527 on residential rental property.
Risk management: insurance and liability
Confirm your policy covers the way you rent. For STR activity, consider a specific short-term rental endorsement or a commercial or landlord policy, along with umbrella liability coverage. Associations often require proof of coverage. STRs can increase exposure to guest-caused damage, noise complaints, and safety incidents, which can lead to fines or disputes if not properly managed.
Financing realities for condos
Lenders may treat condos used for STRs as investment property with higher rates and larger down payments. Condo project eligibility for FHA, VA, Fannie Mae, and Freddie Mac can hinge on factors like owner-occupancy levels, investor concentration, and litigation. Buildings that allow widespread STRs can reduce financing options for buyers, which can also influence resale dynamics.
Due-diligence checklist
Use this checklist before you buy or switch strategies:
Documents and rules
- Declaration of Condominium, bylaws, and all rental-related amendments
- Current rules and regulations, including any minimum lease term
- Board resolutions or owner votes on rentals in the past 3 to 5 years
- Association meeting minutes referencing STR discussions or enforcement
- Any rental caps or investor ownership policies
City, county, and state compliance
- City of Miami Beach short-term rental registration or licensing requirements
- State of Florida and Miami-Dade County tax registration and remittance steps
- Zoning overlays or building-specific restrictions that affect rental use
Finance and insurance
- Lender restrictions on rentals for your mortgage and the building
- Condo project eligibility for FHA, Fannie, and Freddie when relevant
- Insurance requirements and quotes for STR endorsements or landlord policies
Market and operations
- Short-term rental performance data for your building type and area
- Annual rent comparables for similar units
- Realistic net projections after fees, taxes, insurance, utilities, and vacancy
- Quotes from at least two short-term and two long-term property managers
Stakeholders to contact
- Condo association manager or property management company
- Association attorney for rule interpretation when unclear
- City code enforcement or licensing for current ordinance and process
- CPA with Florida vacation rental experience
- Insurance broker familiar with condo and STR coverage
- Lenders or mortgage brokers experienced with Miami Beach condos
How to choose your strategy
Start with permission. If the building or city rules rule out STRs, long-term leasing may be your only path. If both options are allowed, build two pro formas using conservative assumptions. Model seasonality for STRs and include all expenses, including cleaning, consumables, higher insurance, platform fees, and management. For annual leasing, stress test for a month or two of vacancy between tenants and appropriate maintenance.
Match the strategy to your goals and lifestyle:
- Choose STR if you prioritize peak-season upside, want occasional personal use, and have a plan for high-touch management or a reliable manager.
- Choose annual leasing if you want steadier income, fewer moving parts, and simpler insurance and financing.
Your location in Miami Beach and your building’s specific rules will shape outcomes more than averages. Get the facts first.
Next steps and local help
If you want tailored guidance on a specific building, bring the governing documents, recent rule changes, and your financing plan to a focused consultation. We can help you weigh building rules, seasonal demand drivers, and true net returns so you can move forward with clarity. To discuss your condo and goals, connect with Scott Shuffield.
FAQs
Can Miami Beach condo associations ban short-term rentals?
- Yes. Florida condominium associations can adopt and enforce rental restrictions within their governing documents. Many Miami Beach buildings restrict stays below a minimum term or ban STRs entirely. Always review the declaration and rules.
What permits and taxes apply to short-term rentals in Miami Beach?
- Miami Beach requires registration or permits for transient rentals, and short stays are generally subject to state sales tax and local tourist development taxes. Confirm current city and state requirements before booking guests.
Are short-term rentals more profitable than annual leases for condos?
- They can be during peak months, but net results depend on occupancy, management and platform fees, cleaning and utilities, insurance, taxes, and vacancy. Build a conservative pro forma before deciding.
What insurance do I need if I host short-term guests?
- A standard condo HO-6 policy may exclude business use. Obtain a short-term rental endorsement or a commercial or landlord policy, and consider umbrella liability coverage. Your association may require proof of insurance.
How do lenders view condos with heavy STR use?
- Many lenders classify STR units as investment property with higher rates and larger down payments. Buildings with high STR concentration can face limited eligibility for common loan programs, which may affect refinancing and resale.
What should I verify before buying a condo for rentals in Miami Beach?
- Review the condo declaration, bylaws, rental policies, and any recent amendments. Confirm city licensing and taxes, get insurance and management quotes, and run detailed net projections. Always verify the current rules directly with the association and city.
