Condo-Tels are becoming more and more popular. The obvious reasons are use it / rent it. Another option is "fractional ownership" that is starting to make it's way to South Florida. Coconut Grove, as Ramesh points out- is a fantastic location. Look into South Beach, Miami Beach, Sunny Isles Beach also. I like the idea of being on the beach! Many European & American vacationers would like to spend their time on the beach. As a vacationer going to a ski resort would want to be as close to the slopes as possible. Beach or Water is the key in South Florida.
Most important is who & how the property is managed. Carefully review the management documents along with the purchahse and sale agreement. There may be restrictions and limitations that may not be to your liking or travel plans. Many condo/hotels require that you "pool" your condo with the "front-desk" ~ meaning that you would not has the right to rent the unit or have friends stay there at will. The management style and "cut" is also critical, usually the house and owner have a "split" 50/50, 60/40 and the expenses may be taken from the owners (YOUR) end of the revenue.
All in all, I do believe that the condo-hotel investment makes alot of sense. Usually vacation location condo owners only use thier apartment 3-7 weeks per year- so why not generate revenue when it's not in use!
If you're thinking about Northeast Coconut Grove, a Realtor in that area can give you specific info about the market situation that might help you make a decision for that locale.
In some markets, having a condo you own and visit 4 weeks per year could be a good way to invest and at the same time, have a place to stay when you visit.
If the rental market is strong, especially 'executive' rental market or vacationing renters are available then you may have a good fit.
I recently sold a condo in downtown Boulder, Colorado to a buyer that visits Boulder for 3 to 4 weeks at a time but spends most of her time out of the U.S. It's a perfect fit for her and the market has been strong for many years here (both resale and rental) so she should see reasonably good appreciation on her investment as well as have the fall-back position of renting if she feels she needs the added cash flow on the property.
If you have a similar situation where you're considering buying, it could be good for you also.
We work a lot with the foreign owners interested in purchasing condotels (or short term vacation rental units). This is generally more profitable than the regular annual rent. We see 8 to 11% returns in the beach/across the beach areas.
It could be done through the hotel rental program (they vary but generally you get 45 to 50% of net income - after subtraction of management fees and expenses of operation). Or, it could be done privately - by yourself or through your private manager - who advertises on popular American vacation rentals by owners sites like Rentini, Homeaway or VRBO.
When buying with us, we provide you with a quality property manager.
He puts people in, makes sure the unit is clean & the guests are happy.
You visit when you want to in this case (some rental programs have black out dates - when you can not visit - usually major holidays).
You got to read the details of the condo documents and rental program guidelines to see if you the terms are acceptable to you.
Hope this helps,
Beachfront Realty, Inc.
I agree with Zachary - work with a Realtor in the area. I grew up in the Grove/South Miami area. It is, and always be, a strong rental market, as we have lots of people who come down from up north during the winter months to vacation. Being right on the water with a major marina, excellent shopping,dining, and nightlife makes Coconut Grove a great place, so I don't think you can go wrong with any real estate investment there.
Feel free to contact me for further information.