Is Key West, Florida Good for Airbnb Investment?

Potentially—Key West, Florida combines visitor demand with long-term real estate upside.

• 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.
• This consistent demand, despite elevated property costs, can lead to favorable occupancy rates and a solid return on investment for well-managed properties.

$2,500–$8,000, based on location, season, and property quality.

• 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.
• 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.
• Properties within walking distance of downtown attractions consistently outperform those requiring transportation, and successful hosts report that maintaining high cleanliness standards, providing local recommendations.

Potentially strong—typical annual ROI is 8–15%.

• 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.
• Key West's short-term rental market significantly outperforms traditional long-term rentals, which average 4-6% ROI annually.
• The market benefits from consistent occupancy rates of 65-80% throughout the year, driven by Key West's status as a premier tourist destination.

Key West, Florida averages 68–72% annual occupancy, with seasonal variation.

• 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.
• 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.
• 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.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• 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.
• The Truman Annex provides excellent investment potential with its upscale waterfront properties near Fort Zachary Taylor Beach.
• Mid-Town offers a sweet spot for investors with lower property acquisition costs while still maintaining reasonable proximity to major attractions.
• 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.
• 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.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Key West requires short-term rental operators to obtain a Resort Dwelling Unit (RDU) permit through the city's planning department.
• 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.
• 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.
• Recent regulatory changes have included stricter enforcement of existing permits, enhanced noise and nuisance penalties, mandatory posting of occupancy limits and contact information.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• 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.
• 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.
• 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.