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Find Your Airbnb InvestmentInvesting in Airbnb properties in Key West, Florida, presents a compelling opportunity, primarily driven by its unique status as a premier tourist destination. Current market conditions reflect a high demand for short-term rentals, fueled by consistent tourism throughout the year, particularly during peak seasons and events. While property values in Key West are notably high, the robust tourism trends, including a steady influx of visitors drawn to its historic charm, vibrant nightlife, and water activities, contribute to strong rental income potential. This consistent demand, despite elevated property costs, can lead to favorable occupancy rates and a solid return on investment for well-managed properties.
According to various vacation rental market analyses, Airbnb properties in Key West generate average monthly revenues ranging from $2,500 to $8,000, with premium waterfront properties and those near Duval Street commanding the higher end of this spectrum. Seasonal variations are pronounced, with peak winter months (December through March) typically yielding 40-60% higher revenues than summer months due to favorable weather and tourist preferences, while shoulder seasons in spring and fall maintain moderate occupancy rates around 65-75%. Key factors significantly affecting earnings include proximity to popular attractions like Mallory Square and the Historic Seaport, property amenities such as pools and water views, guest capacity with larger properties accommodating 6-8 guests performing better, and professional management services which can increase revenues by 15-25% through optimized pricing and guest experience. Properties within walking distance of downtown attractions consistently outperform those requiring transportation, and successful hosts report that maintaining high cleanliness standards, providing local recommendations, and implementing dynamic pricing strategies based on local events and festivals are crucial for maximizing occupancy rates and nightly rates that typically range from $150-400 depending on property type and season.
Airbnb investments in Key West typically generate ROI between 8-15% annually, with prime waterfront and Old Town properties achieving the higher end of this range due to strong tourist demand year-round. The average payback period for initial investment ranges from 7-12 years, depending on property location and purchase price, with properties near Duval Street and Mallory Square showing faster returns. Key West's short-term rental market significantly outperforms traditional long-term rentals, which average 4-6% ROI annually, primarily because vacation rentals can command $150-400 per night compared to monthly rents of $2,000-4,000 for similar properties. The market benefits from consistent occupancy rates of 65-80% throughout the year, driven by Key West's status as a premier tourist destination, though investors must factor in higher operating costs including frequent turnover cleaning, property management fees of 20-30%, and stricter local regulations that limit new short-term rental permits, creating scarcity value for existing licensed properties.
Key West Airbnb properties maintain an average annual occupancy rate of approximately 68-72%, significantly higher than Florida's statewide average of 62% and the national Airbnb average of 48-52%. The island experiences distinct seasonal patterns with peak occupancy rates reaching 85-90% during winter months (December through March) when northern visitors escape cold weather, and again during Fantasy Fest in October when rates spike to 95%+. Spring break season (March-April) also drives occupancy above 80%, while summer months (June-September) see the lowest rates at 45-55% due to extreme heat, humidity, and hurricane season concerns. The shoulder seasons of late fall (November) and late spring (May) typically maintain moderate occupancy around 65-70%. Key West's consistently higher occupancy rates compared to state and national averages reflect its unique position as a year-round tropical destination with limited accommodation supply, strong brand recognition, and diverse attractions that appeal to various traveler segments throughout the year.
The best Airbnb investment neighborhoods in Key West include Old Town, which offers the highest pricing power due to its proximity to Duval Street, Mallory Square, and historic attractions, attracting premium-paying tourists seeking walkable access to nightlife and cultural sites. The Truman Annex provides excellent investment potential with its upscale waterfront properties near Fort Zachary Taylor Beach, appealing to affluent visitors willing to pay higher rates for luxury accommodations and beach access. Mid-Town offers a sweet spot for investors with lower property acquisition costs while still maintaining reasonable proximity to major attractions, attracting budget-conscious families and groups. The Casa Marina area commands strong rental rates due to its beachfront location and resort-style amenities, drawing couples and luxury travelers. Bahama Village presents emerging investment opportunities with authentic Caribbean culture and improving infrastructure, appealing to travelers seeking unique cultural experiences at moderate price points. New Town provides the most affordable entry point for investors with good rental demand from longer-stay visitors and workers, though with lower nightly rates. The Sunset Key area, while requiring higher initial investment, offers ultra-premium pricing potential for luxury vacation rentals targeting high-end travelers seeking exclusive island experiences.
Key West requires short-term rental operators to obtain a Resort Dwelling Unit (RDU) permit through the city's planning department, with permits limited to properties in specific zoning districts including Resort Commercial, Mixed Use, and certain residential zones, while prohibiting short-term rentals in single-family residential neighborhoods. Properties must register annually with the city and obtain a business tax receipt, with occupancy limited to two people per bedroom plus two additional guests, not exceeding 10 people total regardless of property size. Owner-occupancy is not required for permitted units, but properties must have an on-island contact person available 24/7 for guest issues and complaints. The registration process involves submitting applications with property surveys, floor plans, parking documentation, and paying fees ranging from several hundred to over a thousand dollars depending on unit size and type. Recent regulatory changes have included stricter enforcement of existing permits, enhanced noise and nuisance penalties, mandatory posting of occupancy limits and contact information, and increased scrutiny of permit transfers, with the city maintaining a cap on the total number of RDU permits available and requiring compliance inspections before permit renewals.
Short-term rentals in Key West, Florida are subject to multiple fees and taxes including a 6% Florida state sales tax, a 5% Monroe County tourist development tax, and a 1% Monroe County infrastructure surtax, totaling 12% in combined taxes on rental income. Property owners must obtain a Monroe County vacation rental license costing approximately $500-750 annually, plus a state sales tax permit fee of $5. The City of Key West requires a business tax receipt ranging from $30-100 depending on the property size and location. Additional costs include a one-time registration fee of around $150-200 for new applications, mandatory inspections costing $100-200 annually, and potential homeowners association fees if applicable. Properties must also comply with fire safety inspections at approximately $75-125 per visit, and owners may need to pay for required signage and posting of permits costing $50-100. Resort tax collections require monthly remittance to the state and county, with potential penalties of 10% plus interest for late payments.
Investing in Airbnb properties in Key West, Florida, presents a compelling opportunity, primarily driven by its unique status as a premier tourist destination. Current market conditions reflect a high demand for short-term rentals, fueled by consistent tourism throughout the year, particularly during peak seasons and events. While property values in Key West are notably high, the robust tourism trends, including a steady influx of visitors drawn to its historic charm, vibrant nightlife, and water activities, contribute to strong rental income potential. This consistent demand, despite elevated property costs, can lead to favorable occupancy rates and a solid return on investment for well-managed properties.
According to various vacation rental market analyses, Airbnb properties in Key West generate average monthly revenues ranging from $2,500 to $8,000, with premium waterfront properties and those near Duval Street commanding the higher end of this spectrum. Seasonal variations are pronounced, with peak winter months (December through March) typically yielding 40-60% higher revenues than summer months due to favorable weather and tourist preferences, while shoulder seasons in spring and fall maintain moderate occupancy rates around 65-75%. Key factors significantly affecting earnings include proximity to popular attractions like Mallory Square and the Historic Seaport, property amenities such as pools and water views, guest capacity with larger properties accommodating 6-8 guests performing better, and professional management services which can increase revenues by 15-25% through optimized pricing and guest experience. Properties within walking distance of downtown attractions consistently outperform those requiring transportation, and successful hosts report that maintaining high cleanliness standards, providing local recommendations, and implementing dynamic pricing strategies based on local events and festivals are crucial for maximizing occupancy rates and nightly rates that typically range from $150-400 depending on property type and season.
Airbnb investments in Key West typically generate ROI between 8-15% annually, with prime waterfront and Old Town properties achieving the higher end of this range due to strong tourist demand year-round. The average payback period for initial investment ranges from 7-12 years, depending on property location and purchase price, with properties near Duval Street and Mallory Square showing faster returns. Key West's short-term rental market significantly outperforms traditional long-term rentals, which average 4-6% ROI annually, primarily because vacation rentals can command $150-400 per night compared to monthly rents of $2,000-4,000 for similar properties. The market benefits from consistent occupancy rates of 65-80% throughout the year, driven by Key West's status as a premier tourist destination, though investors must factor in higher operating costs including frequent turnover cleaning, property management fees of 20-30%, and stricter local regulations that limit new short-term rental permits, creating scarcity value for existing licensed properties.
Key West Airbnb properties maintain an average annual occupancy rate of approximately 68-72%, significantly higher than Florida's statewide average of 62% and the national Airbnb average of 48-52%. The island experiences distinct seasonal patterns with peak occupancy rates reaching 85-90% during winter months (December through March) when northern visitors escape cold weather, and again during Fantasy Fest in October when rates spike to 95%+. Spring break season (March-April) also drives occupancy above 80%, while summer months (June-September) see the lowest rates at 45-55% due to extreme heat, humidity, and hurricane season concerns. The shoulder seasons of late fall (November) and late spring (May) typically maintain moderate occupancy around 65-70%. Key West's consistently higher occupancy rates compared to state and national averages reflect its unique position as a year-round tropical destination with limited accommodation supply, strong brand recognition, and diverse attractions that appeal to various traveler segments throughout the year.
The best Airbnb investment neighborhoods in Key West include Old Town, which offers the highest pricing power due to its proximity to Duval Street, Mallory Square, and historic attractions, attracting premium-paying tourists seeking walkable access to nightlife and cultural sites. The Truman Annex provides excellent investment potential with its upscale waterfront properties near Fort Zachary Taylor Beach, appealing to affluent visitors willing to pay higher rates for luxury accommodations and beach access. Mid-Town offers a sweet spot for investors with lower property acquisition costs while still maintaining reasonable proximity to major attractions, attracting budget-conscious families and groups. The Casa Marina area commands strong rental rates due to its beachfront location and resort-style amenities, drawing couples and luxury travelers. Bahama Village presents emerging investment opportunities with authentic Caribbean culture and improving infrastructure, appealing to travelers seeking unique cultural experiences at moderate price points. New Town provides the most affordable entry point for investors with good rental demand from longer-stay visitors and workers, though with lower nightly rates. The Sunset Key area, while requiring higher initial investment, offers ultra-premium pricing potential for luxury vacation rentals targeting high-end travelers seeking exclusive island experiences.
Key West requires short-term rental operators to obtain a Resort Dwelling Unit (RDU) permit through the city's planning department, with permits limited to properties in specific zoning districts including Resort Commercial, Mixed Use, and certain residential zones, while prohibiting short-term rentals in single-family residential neighborhoods. Properties must register annually with the city and obtain a business tax receipt, with occupancy limited to two people per bedroom plus two additional guests, not exceeding 10 people total regardless of property size. Owner-occupancy is not required for permitted units, but properties must have an on-island contact person available 24/7 for guest issues and complaints. The registration process involves submitting applications with property surveys, floor plans, parking documentation, and paying fees ranging from several hundred to over a thousand dollars depending on unit size and type. Recent regulatory changes have included stricter enforcement of existing permits, enhanced noise and nuisance penalties, mandatory posting of occupancy limits and contact information, and increased scrutiny of permit transfers, with the city maintaining a cap on the total number of RDU permits available and requiring compliance inspections before permit renewals.
Short-term rentals in Key West, Florida are subject to multiple fees and taxes including a 6% Florida state sales tax, a 5% Monroe County tourist development tax, and a 1% Monroe County infrastructure surtax, totaling 12% in combined taxes on rental income. Property owners must obtain a Monroe County vacation rental license costing approximately $500-750 annually, plus a state sales tax permit fee of $5. The City of Key West requires a business tax receipt ranging from $30-100 depending on the property size and location. Additional costs include a one-time registration fee of around $150-200 for new applications, mandatory inspections costing $100-200 annually, and potential homeowners association fees if applicable. Properties must also comply with fire safety inspections at approximately $75-125 per visit, and owners may need to pay for required signage and posting of permits costing $50-100. Resort tax collections require monthly remittance to the state and county, with potential penalties of 10% plus interest for late payments.
* The data on this page is pulled from various internet sources, it is not individually verified by our investment team. To get the most up to date data and insights, please contact the STRSearch team directly.
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To start an Airbnb in Key West, Florida, begin by researching Monroe County's strict short-term rental regulations, which require properties to have a valid Certificate of Use and Business Tax Receipt, with many areas having moratoriums on new permits since 2018. Obtain necessary permits including a Monroe County Business Tax Receipt ($50-100 annually), Certificate of Use for transient lodging ($200-500), and ensure compliance with the 3% Tourist Development Tax and 6% Florida sales tax. Find a property in areas zoned for short-term rentals, focusing on Old Town or New Town districts where permits may be available, with typical purchase prices ranging $400,000-$2 million depending on size and location. Furnish the property with hurricane-resistant, coastal-themed décor including essentials like linens, kitchen supplies, and outdoor furniture suitable for the tropical climate, budgeting $15,000-30,000 for a complete setup. List your property on Airbnb, VRBO, and local platforms, highlighting Key West attractions like Duval Street, Mallory Square sunsets, and water activities, with competitive nightly rates typically ranging $150-500 depending on property size and season. Manage the property by hiring local cleaning services ($75-150 per turnover), maintenance contractors familiar with salt air corrosion issues, and consider property management companies like RedAwning or Vacasa that charge 15-25% commission but handle guest communication, check-ins, and emergency responses in this tourist-heavy market.
For identifying profitable short-term rental properties in Key West, Florida, focus on locations within walking distance of Duval Street, Mallory Square, or popular beaches like Smathers Beach, as proximity to attractions drives higher occupancy rates. Target properties with 2-4 bedrooms, outdoor spaces like pools or decks, parking availability, and unique architectural features like Conch Republic-style homes or historic properties that command premium rates of $200-500+ per night depending on size and amenities. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties, aiming for markets with average daily rates above $250 and occupancy rates over 70%, while researching competition density through Airbnb and VRBO searches to identify oversaturated areas. Key West's tourism peaks during winter months (December-April) and special events like Fantasy Fest in October, so properties should capitalize on seasonal pricing strategies. Utilize tools like Rabbu, PriceLabs for dynamic pricing, and consult local STR management companies like Rent Key West or Vacation Rental Pros for market insights, while ensuring compliance with Monroe County's strict STR regulations including ROGO (Rate of Growth Ordinance) allocations and business tax requirements that can significantly impact profitability and legal operation.
To obtain an Airbnb/STR permit in Key West, Florida, you must apply through the City of Key West Planning Department located at 1300 White Street. Required documents include a completed short-term rental application, proof of property ownership or lease agreement, floor plan showing maximum occupancy, parking plan demonstrating adequate off-street parking, contact information for a local responsible party available 24/7, certificate of insurance, and payment of applicable fees. The application fee is approximately $500 with an annual renewal fee of $300, plus additional inspection fees of around $150. The timeline typically takes 60-90 days for initial approval due to the city's cap on STR permits and thorough review process. Key West-specific requirements include adherence to the Residential Short-Term Rental (RSTR) ordinance which limits occupancy to two people per bedroom plus two additional guests, mandatory provision of one off-street parking space per bedroom, compliance with noise ordinances, posting of house rules and emergency contact information, and maintaining the property as the owner's primary residence for certain permit types. Properties must also meet all building and fire safety codes, and owners must register with the Florida Department of Revenue for tax collection purposes.
Short-term rentals (STRs) are legal in Key West, Florida, but operate under strict regulations implemented by the city. As of 2023, Key West requires STR operators to obtain a business tax receipt and comply with zoning restrictions that limit rentals primarily to commercial and mixed-use districts, while prohibiting them in most residential neighborhoods to preserve housing stock for locals. The city caps the total number of STR licenses and requires properties to meet specific safety standards, parking requirements, and noise ordinances. Recent legal changes include stricter enforcement measures and increased penalties for violations, with the city conducting regular inspections and responding to neighbor complaints. Properties must also comply with Monroe County's additional regulations regarding septic systems and environmental protections, and operators face significant fines for operating without proper permits or violating occupancy limits, reflecting the city's ongoing effort to balance tourism revenue with resident quality of life concerns.
The most lucrative Airbnb investment areas in Key West include Old Town/Historic District, particularly near Duval Street and Mallory Square, which attracts millions of tourists annually for sunset celebrations, historic tours, and nightlife, with properties commanding $200-400+ per night. The Truman Annex neighborhood offers upscale vacation rentals near Fort Zachary Taylor Beach and appeals to higher-end travelers seeking luxury accommodations within walking distance of attractions. The Bahama Village area provides emerging investment opportunities with authentic Caribbean culture and proximity to Fort East Martello, attracting cultural tourists and offering lower entry costs with strong appreciation potential. Mid-Town Key West, including areas around White Street and Atlantic Boulevard, offers good value investments with easy access to beaches and downtown while maintaining residential charm that appeals to families and longer-stay visitors. The Sunset Key area, though limited in availability, commands premium rates of $500-1000+ per night due to its exclusive resort-like atmosphere and ferry access to downtown, making it ideal for luxury market positioning.
In Key West, Florida, Airbnb hosts must collect and remit several lodging taxes including the Florida state sales tax of 6%, Monroe County tourist development tax of 4%, and the City of Key West resort tax of 1.5%, totaling 11.5% in combined taxes on short-term rental stays. The Florida Department of Revenue requires hosts to register for a sales tax permit and file monthly returns by the 20th of the following month, while the Monroe County tourist development tax must be remitted monthly to the Monroe County Tax Collector's office by the 20th of each month. The City of Key West resort tax is collected by the city's finance department with similar monthly reporting requirements. Airbnb may collect and remit these taxes automatically through their platform for participating hosts, but property owners remain ultimately responsible for compliance. Stays of 30 days or longer are typically exempt from tourist development and resort taxes but may still be subject to sales tax, and certain exemptions may apply for government employees or other qualifying guests with proper documentation.
Starting an Airbnb in Key West, Florida requires significant upfront investment due to the area's premium real estate market. Property purchase costs average $850,000 for a median 2-bedroom condo suitable for short-term rentals, though single-family homes can exceed $1.2 million. Furnishing costs typically range $25,000-$40,000 for a complete vacation rental setup including quality furniture, appliances, linens, and décor that appeals to tourists. Initial setup expenses include professional photography ($500), listing optimization ($1,000), and welcome amenities ($800). Permits and fees are substantial, with Monroe County requiring a Certificate of Use ($2,500), transient rental license ($1,200 annually), and various inspection fees totaling approximately $3,000. Insurance costs run $4,000-$6,000 annually for comprehensive coverage including liability and property protection. Monthly utilities average $300-$450 for electricity, water, internet, and cable services. First six months operating costs include property management fees (20-30% of revenue, approximately $15,000), cleaning services ($150 per turnover, roughly $7,200), maintenance and repairs ($3,000), marketing ($2,000), and supplies ($1,800). The total initial investment ranges from $920,000 to $1.3 million depending on property type and furnishing choices, making Key West one of the most expensive markets for Airbnb investment in Florida.
Airbnb properties in Key West, Florida demonstrate strong profitability potential with average annual revenues ranging from $45,000-$85,000 for well-positioned properties, driven by the city's year-round tourism demand and limited hotel inventory. A typical 2-bedroom vacation rental generates approximately $3,800-$7,000 monthly during peak season (December-April) and $2,500-$4,500 during off-season, with occupancy rates averaging 70-85% annually. Operating expenses typically consume 35-45% of gross revenue, including property management fees (20-25%), cleaning costs ($75-$150 per turnover), utilities ($200-$400 monthly), insurance ($2,000-$4,000 annually), and maintenance reserves, resulting in net profit margins of 25-35% for successful operators. Properties within walking distance of Duval Street, Mallory Square, or featuring unique amenities like private pools or historic charm command premium rates of $200-$450 per night compared to $120-$280 for standard properties. Success factors include strategic pricing optimization, professional photography, responsive guest communication, and maintaining consistently high review ratings above 4.7 stars, with top-performing hosts like those managing restored Conch Republic-style homes or waterfront cottages achieving annual returns of 8-12% on property investment while building substantial equity in one of Florida's most appreciating real estate markets.
Airbnb investments in Key West, Florida typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15% depending on property location and management efficiency. Properties within walking distance of Duval Street and historic downtown command premium nightly rates of $200-400, while those in residential areas average $150-250 per night with occupancy rates of 65-75% annually. Initial profitability usually occurs within 18-24 months for well-positioned properties, with full investment recovery typically achieved in 6-8 years. The market benefits from year-round tourism demand, though hurricane season and occasional regulatory changes can impact performance, with successful operators like RedAwning and Vacasa reporting gross rental yields of 15-22% before expenses in prime Key West locations as of 2023-2024.
STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors in Key West, Florida. Local real estate agents like Truman & Company, Bascom Grooms Real Estate, and Coldwell Banker Schmitt Real Estate have extensive experience with vacation rental properties in the Key West market. National services include Mashvisor, which provides Airbnb analytics and investment property search tools, AirDNA for market data and revenue projections, and BiggerPockets for investor networking and property analysis. RedAwning offers property management and investment services for short-term rentals, while companies like Vacasa and AvantStay provide full-service property management for Airbnb investments. Local property management companies such as Key West Vacation Properties and Rent Key West specialize in managing short-term rentals and can assist investors with property acquisition. Additional services include STR Helper for market analysis, Rabbu for property search and analytics, and local investment groups like the Florida Keys Real Estate Investors Association that provide networking opportunities and market insights for Airbnb property investments in the Key West area.
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