In-depth analysis

Should you buy an STR in Key West in 2026?

Only with a transferable transient-rental license. Key West has the strongest underlying STR economics in the state — $358 ADR, 73% occupancy, $261 RevPAR — but Monroe County and the City of Key West have used a transient-rental licensing regime to cap supply for over two decades. New nightly-rental licenses are not being issued in most zones; existing licenses transfer with the property. The 74/100 market score reflects this scarcity premium, not market openness.

Regulation: where the city stands

City of Key West — operates a transient-rental license (TRL) program. New licenses are largely unavailable outside specific zones (some commercial / hotel-zoned districts). Existing TRLs are transferable with the property and command a meaningful price premium.
28-day-and-under stays — require the transient license; longer stays (29+ days) generally do not.
Monroe County (unincorporated, lower Keys) — separate rules, also licensing-based and capped.
Tourist development tax + state sales tax + Monroe County impact tax — all apply.

The deal-defining question: does this property carry a transferable, current TRL? Confirm with the city, in writing, before EMD goes hard. See the City of Key West licensing department transient-rental page.

The market by the numbers

Metric	Key West	Notes
Avg ADR	$358	Highest in the batch
Occupancy	73%	Year-round demand
RevPAR	$261	Best in the Sun Belt
Market score	74/100	License scarcity = price premium
Saturation tier	A	Capped supply

Submarkets that matter

Old Town / Duval — historic, tourist core; some TRL inventory; highest pricing.
Mid-town / New Town — fewer TRL properties; lower density.
Stock Island (Monroe County) — separate jurisdiction; some commercial-zoned STR inventory.
Lower Keys (Big Pine, Cudjoe, Sugarloaf) — Monroe County rules; separate licensing.

The 3 mistakes buyers make here

Buying a property assuming you can apply for a new TRL. In most zones, you cannot. The license must transfer with the property at closing.
Underestimating hurricane and flood insurance. Key West is a barrier-island in an active hurricane zone. Premiums on a $1M property routinely exceed $20K-$40K per year.
Modeling 90%+ occupancy. The market runs 70-75% on average; outliers exist but should not anchor a pro forma.

What to do next

Confirm transient-rental license transferability in writing before EMD goes hard.
Get a bound insurance quote (Citizens or private market) and use it in DSCR Loan Calculator.
Run Comp Analyzer on licensed properties only.
Use Year 1 Cash Needs with hurricane prep and special-assessment reserves.
Read Licensed-Cap Markets and the Scarcity Premium.

Not investment advice. Verify all regulatory, tax, and insurance information with local authorities and licensed professionals before committing capital.

Last reviewed 2026-05-07 · Estimated — community-sourced · Population 24,649