Key West STR Market 2026. What the Data Shows for Investors in Floridas Most Constrained Island Rental Economy

On a warm Thursday evening in March, the corner of Duval and Greene smells like fried conch and sunscreen. A busker plays “Margaritaville” for the hundredth time this week, and nobody minds. Tourists spill out of bars, couples hold hands on their way to Mallory Square for the sunset. This is the postcard version of Key West, the one that sells a million plane tickets a year.

But walk three blocks off Duval, past the guest houses and the scooter rental shops, and the island tells a different story. A hand-lettered sign in a restaurant window reads “HELP WANTED” in English and Spanish: “Se busca personal.” The dishwasher who used to live two streets over now commutes 45 minutes from Stock Island because his landlord converted the building to vacation rentals.

Key West is one of the most profitable short-term rental markets in Florida, and the numbers back that up. StaySTRA data shows 3,390 active listings, a last-twelve-month average daily rate of $478, and occupancy running at 73.3%. That LTM average monthly revenue of $7,590 per listing puts Key West well above most Florida beach markets. But the story behind those numbers is what makes this island unlike anywhere else in the state.

The Numbers Behind Key West’s STR Performance

Let me walk through what the data actually shows, because the revenue picture here is unusually strong.

StaySTRA tracks 3,390 active short-term rental listings in Key West. The last-twelve-month average daily rate is $478, with occupancy at 73.3%. That combination produces an LTM monthly revenue of $7,590 per listing.

For context, that $478 ADR is among the highest in Florida. Miami runs around $274 per night. Myrtle Beach sits at $198. Even Scottsdale, one of the pricier western resort markets, clocks in below Key West. The island’s geographic isolation (you can only fit so many rentals on a 7-square-mile island) keeps supply naturally constrained, and that constraint shows up directly in pricing power.

Here is how monthly revenue breaks down across the year:

The seasonal pattern is clear. Winter is king. February hits $585 ADR with nearly 93% occupancy, and March delivers the highest total revenue at $11,110 per listing. The summer months drop off significantly, with September bottoming out at $4,474. That is a 2.5x swing from peak to trough, less extreme than many seasonal beach markets (Myrtle Beach swings 6.6x) but still meaningful for cash flow planning.

What the Property Mix Looks Like

Key West’s rental inventory skews toward smaller properties, which makes sense on an island where space is precious. StaySTRA data breaks it down:

• Studios: 66 listings
• 1-bedroom: 624 listings
• 2-bedroom: 1,041 listings
• 3-bedroom: 442 listings
• 4-bedroom: 207 listings
• 5+ bedroom: 131 listings

Two-bedroom units dominate at nearly a third of all listings. The sweet spot for investors tends to fall in the 2-3 bedroom range, where you capture couples, small groups, and the wedding-weekend crowd that Key West draws year-round.

The License Wall That Defines This Market

Here is where Key West separates itself from nearly every other STR market in the country.

The City of Key West stopped issuing new transient rental licenses years ago. Every license that existed before the freeze was grandfathered in, and no new ones are being created. If you want to operate a short-term rental in Key West today, you need to buy a property that already holds a transient license.

Those licenses now trade on the secondary market for $400,000 to $500,000.

Read that number again. Before you buy the property, before you furnish it, before you list your first guest, you are looking at a license cost that exceeds the median home price in most American cities. The license is tied to the property, not the owner, so it transfers with the sale. But that means the license premium gets baked into the purchase price of every STR-eligible property on the island.

The median home price in Key West already sits around $1 million. Condos average roughly $769,000. Combine that with the license premium and you are looking at an all-in entry cost that prices out most casual investors.

This is not an accident. It is a deliberate policy choice. Key West decided years ago that it had enough short-term rentals, and the license freeze was the mechanism to hold the line.

Monroe County’s Separate Rulebook

Outside the city limits of Key West, unincorporated Monroe County operates under a different regulatory framework. The county issues Special Vacation Rental Permits through its Planning & Environmental Resources Department, but the rules are strict.

Short-term rentals (anything under 28 days) are only permitted in specific zoning districts: Suburban Residential (SR), Mixed Use (MU), Urban Residential (UR), and a handful of others. They are prohibited in Improved Subdivision (IS) and Urban Residential Mobile Home (URM) zones.

The county requires an annual permit ($490 initial, $100 renewal), a licensed vacation rental manager who must be available around the clock to respond to complaints, fire and life safety inspections, and a business tax license. The rules on advertising are pointed: all listings must display the 28-day minimum stay requirement and monthly rates.

For investors looking at properties in the Lower Keys outside Key West proper (Stock Island, Big Coppitt, Sugarloaf), these county rules create a different kind of constraint. The 28-day minimum in many areas effectively converts what would be short-term rentals into monthly furnished rentals, which is a viable model but a very different business.

La Otra Cara de la Moneda (The Other Side of the Coin)

Walking through Key West as someone who writes about communities shaped by short-term rentals, I find myself thinking about the workers who keep this island running. The bartenders, the housekeepers, the boat captains, the line cooks. La gente que hace posible el paraíso. The people who make paradise possible.

The average one-bedroom apartment in Key West rents for $2,865 per month. That is comparable to San Francisco. The cost of living here runs 48% above the national average, with housing costs roughly 200% above the U.S. median. A hotel housekeeper making $16 an hour is not affording that. Neither is a restaurant server, a preschool teacher, or a fishing charter deckhand.

The result is a workforce that increasingly commutes from the mainland or from lower-cost islands further up the Keys. Stock Island, the island just east of Key West, has absorbed much of the displacement. Monroe County allocated $10 million to the Key West Housing Authority in 2025 for 20 new affordable rental units for tourism workers at Poinciana Plaza. The city requires 30% of all newly built or redeveloped residential units to be set aside for workforce housing.

These are not abstract policy debates on this island. The tension between tourism revenue and livable communities plays out on every block. Where some see an investment opportunity, others see their neighbor’s apartment becoming a vacation rental. Both perspectives are valid, and honest investors acknowledge that the returns they earn exist within this tension.

Seasonality and the Events Calendar

Key West’s seasonal demand pattern differs from typical Florida beach markets because the island draws visitors for culture and events, not just sun.

Peak season (January through April) is the main revenue window. Snowbirds, spring breakers, and wedding groups drive occupancy above 80% for four consecutive months. February and March consistently top $10,000 in monthly revenue per listing.

Fantasy Fest (October 16-25 in 2026) is the island’s signature event, drawing over 75,000 visitors for a 10-day festival of parades, costume competitions, and street parties. October’s revenue ($5,899) sits well above September’s trough ($4,474), and Fantasy Fest week commands premium nightly rates. The festival was created in 1979 specifically to boost the shoulder season, and it works.

Holiday season (Thanksgiving through New Year’s) brings another surge. December revenue hits $8,669, and the island’s proximity to cruise ship traffic adds day-visitor spending to the local economy even if those visitors are not booking overnight rentals.

Summer (June through September) is the slow period. Hurricane season concerns, oppressive humidity, and competition from northern beach destinations pull occupancy below 50% in August and September. Smart operators use dynamic pricing to keep units filled at reduced rates during these months, and some use the downtime for property maintenance and renovation.

The Investment Case, Both Sides

What works in Key West’s favor:

• Supply is genuinely capped. You cannot build your way out of scarcity on a 7-square-mile island with a frozen license system. This is not a regulatory risk that could be reversed easily. The community supports the cap.
• Pricing power is real. A $478 LTM ADR with 73.3% occupancy puts Key West in elite company among U.S. STR markets.
• Demand is diversified. Winter snowbirds, spring break, weddings, Fantasy Fest, holiday season, cruise ship traffic. No single demand source dominates.
• The Florida tax advantage. No state income tax on rental income. Combined with the Keys’ tourism-friendly tax structure, operators keep more of what they earn.

What works against it:

• Entry cost is extreme. A $1M+ property plus a $400K-$500K license premium means you need significant capital or creative financing to get in.
• Hurricane exposure. Key West sits at the end of the island chain, fully exposed to Atlantic hurricanes. Insurance costs are rising across Florida, and the Keys feel that pressure acutely.
• Seasonal cash flow gap. The 2.5x swing from peak to trough means three to four months of meaningfully lower revenue. Investors need reserves.
• Political risk is real. The housing affordability debate is intense and ongoing. Any further tightening of STR rules would affect existing operators, not just new entrants.
• Management complexity. Remote management from the mainland is possible but harder here. Island logistics (contractors, supplies, emergency response) add friction that mainland markets do not have.

What the Listing Growth Tells Us

StaySTRA data shows Key West grew from approximately 1,200 active listings in 2013 to 3,390 today. That growth curve has flattened significantly in recent years as the license cap took full effect. The market is approaching a natural ceiling, and any future growth will come almost entirely from properties changing hands rather than new supply entering the market.

For existing operators, that flattening supply curve is the entire thesis. Demand keeps growing (Key West attracts roughly 1 million visitors annually), but supply cannot follow. That imbalance is what sustains the $478 ADR.

The population of 29,957 means that short-term rental listings represent roughly one unit for every nine residents. That ratio is among the highest in the country and explains why the housing debate is so personal here. No es un número en una hoja de cálculo. It is not a number on a spreadsheet. It is the apartment next door.

We do our best to keep our content accurate and up to date, but things change and we are only human. Always verify details directly with local sources before making decisions.

Run the Numbers for Key West

Every property on this island pencils differently depending on bedrooms, location, and license status. Plug your target address into the StaySTRA Key West Airbnb Calculator to see revenue projections based on actual booking data. You can also explore the full Key West market dashboard for deeper data on ADR, occupancy, and seasonal trends across the island.