Buying a Vacation Rental in the Florida Keys: What You Need to Know Before Season

The Florida Keys are famous for turquoise waters, laid-back island vibes, and a steady stream of visitors year-round so it’s no surprise that many buyers dream of owning a vacation rental property here. A vacation rental can act as both a getaway spot and a source of income. But before the season kicks off, there are a few key things to know about licensing, demand, and return on investment (ROI) if you’re eyeing a short-term rental in the Keys.

1. Licensing & Regulations

Short-term rentals in Monroe County (which includes Key West, Marathon, Islamorada, and the Lower Keys) are tightly regulated. Each municipality has its own rules, so what’s allowed in one Key might not be in another.

• Vacation Rental Licenses: Properties rented for fewer than 30 days usually require a special license from the city or county. For example, in Key West, a Transient Rental License is needed. These are limited and can be pricey.

• Zoning Rules: Some neighborhoods restrict or ban short-term rentals altogether to preserve residential character. Always check zoning maps before you buy.

• State & County Requirements: You’ll also need to register with the Florida Department of Business and Professional Regulation (DBPR) and the county for bed tax collection.

Tip: Work with a local realtor who knows the ins and outs of vacation rental licensing—it can save you costly headaches later.

2. Demand: Why Rentals Stay Hot

Tourism is the lifeblood of the Florida Keys, and demand for vacation rentals shows no signs of slowing.

• Year-Round Appeal: Winter brings snowbirds, spring and summer bring families, and fall is packed with events like Fantasy Fest in Key West.

• Higher Rates in Season: From December through April, nightly rates peak thanks to strong demand. Buyers who close before the season can hit the ground running with bookings.

• Shift Toward Private Stays: More travelers are choosing vacation homes over hotels for space, privacy, and local charm—fueling steady demand.

3. ROI: Crunching the Numbers

Owning a vacation rental here can be profitable, but ROI depends on smart planning.

• Average Nightly Rates: In Key West, rentals often fetch $300–$700+ per night , depending on location and amenities. Waterfront homes and properties with pools command the highest rates.

• Occupancy Rates: Properties in the Keys can see 65–75% occupancy annually, higher in peak season.

• Operating Costs: Factor in property management fees (10–20% if you hire a local company), cleaning, insurance (flood + windstorm), utilities, and maintenance.

• Long-Term Value: Beyond rental income, property values in the Keys historically hold strong thanks to limited land and high demand for island living.

4. Lifestyle & Community Considerations

Buying a vacation rental here isn’t just a financial decision—it’s about joining a community.

• Local Flavor: Each Key has its own vibe. Key West is lively and historic, Islamorada is a sportfishing hub, Marathon is family-friendly, and the Lower Keys are more secluded.

• Responsibility as a Host: Vacation rentals bring you into the heart of the community. Responsible ownership—respecting noise ordinances, trash schedules, and neighbors—helps maintain harmony.

• Personal Use: Many buyers balance personal enjoyment with rentals, blocking off weeks for family and renting out the rest of the year.

Buying a vacation rental in the Florida Keys can be a smart investment and a lifestyle upgrade. But success comes down to preparation: understanding licensing, recognizing demand patterns, and running the numbers honestly. With the season just around the corner, now’s the time to explore opportunities so you’re ready to capture the winter rental rush.

If you're thinking of exploring the vacation rental market of the Florida Keys contact one of our local real estate experts to guide you home.