One thing you need to know when considering investing in Key West real estate is that there are two types of vacation rentals in the City of Key West; transient and non-transient.
A property with a transient license can rent like a hotel, by the night. A non-transient licensed property requires a minimum 30 day lease.
Transient licensed properties allow for more rentals per year and as a result you can expect to see returns of 10-12% on the gross purchase price. The City of Key West used to issue transient rental licenses for a nominal fee to those homeowners who wished to rent their homes by the night. They stopped issuing those licenses quite a few years ago, but grandfathered all licenses that were in existence. The result? Think NYC taxi medallions, but on a smaller scale of course.
As a result of the high demand and limited supply, transient licensed properties have been selling at a premium and even above asking price in some cases.
Non transient rentals are required to have a month long lease (minimum 28 days) and can expect to see 5-6% return on their gross purchase price. Although non-transient rentals can expect to see a bit less in rental income they also come with a lower price tag. You are probably asking yourself if there is even a market for month long rentals in Key West. The answer is yes, absolutely! Last Key Realty manages over 100 luxury vacation rentals and more than half of them are non-transient.
The type of vacation rental you purchase depends on what your needs and wants as a homeowner are. Whether you are looking for maximum return, a seasonal home, or both I am uniquely qualified to help you choose the perfect home for your needs! Contact me today to talk more about investing in Key West real estate.