4 Benefits of Buying a Vacation Rental Home in the Florida Keys
You just came back from a relaxing Key West vacation and you had such a fantastic time that you start dreaming about packing up and moving there— someday. But until that day comes, you’ve decided to invest in a Key West vacation rental home.
It’s no secret that the vacation rental industry is booming. Currently, the global vacation rental market is worth about $100 billion— and is expected to reach $170 billion by the end of 2019. And here in the Florida Keys, we are definitely experiencing that impressive growth for ourselves.
Perhaps you’ve been thinking of purchasing an investment property for a while, or maybe the promising growth of the market has made you want to jump in and invest in a vacation rental property. Either way, we’re here to help you.
The City of Key West places strict regulations on transient rental properties. So before you go looking make sure to partner with an experienced agency— like Buy The Keys/Vacasa Florida LLC— that knows the local market inside and out and can help guide you on the path to purchasing the perfect Key West vacation rental home for your needs and budget.
Here are four reasons to take the plunge into a vacation rental home investment in Key West— and a few expert pro tips.
1. The location can’t be beat.
As a vacation rental destination, it doesn’t get much better than Key West. The Florida Keys are a popular and beloved global tourist destination. The clear turquoise water and warm sandy beaches draw hundreds of thousands of visitors to the island chain every year. There are so many different types of vacation rental homes and locations to choose from, making the Florida Keys an ideal vacation rental home investment location.
From the bachelorette party looking for Duval Street fun to the small family wanting a private pool to the young couple seeking honeymoon bliss— there’s something for everyone in Key West.
Key West has an exceptional inventory of architecture, too. Whether you are looking for a charming cottage in the historic district or a modern condominium by the beach, there is a vacation rental home to fit every style and personality of investor and traveler alike. And because of this, a well-managed Key West vacation rental investment will have very few unbooked days.
2. The income potential is impressive.
Transient vacation rental homes and monthly rentals in the Florida Keys rent for top dollar in the high season of December through April. But even in the summer months, Key West is packed with visitors. This means your booking calendar will be full of travelers— and your bank account full of income.
Keep in mind that there is a rhythm to a tourist destination, and your income during some months will be higher than in other months. This is the nature of tourism. Make sure to do a detailed budget of your vacation rental income and expenses before taking the plunge into ownership.
Once you’re serious about a specific property, you can ask the current property manager for some recent financial reports to give you a better idea of what you can expect for income. A respectable property management company will happily provide them to you after you sign a confidentiality agreement.
A steady stream of vacation rental income will cover most mortgage payments, taxes, and maintenance fees on the property. So not only will you have a gorgeous second home, but you’ll have a second source of regular income too. And like your primary residence, you’ll also receive tax deductions for things like mortgage interest, insurance premiums, property tax, some utilities, and other rental expenses.
Pro Tip: We recommend working with a real estate attorney or accountant to make sure you are taking maximum advantage of all tax breaks— without breaking any laws.
3. It’s a dual-purpose property.
Owning a vacation rental home in Key West means two things: not only do you own a home in one of your favorite places on earth, but you also have a steady source of secondary income. A few times a year, invite some family and friends to join you in Key West for a blissful vacation at a home you’re familiar and comfortable with. Then rent the home out to Key West visitors when you’re not there. It’s a classic win-win scenario.
Pro tip: Consider installing an “owner’s closet” in your rental home. This is a locked closet where you can keep personal items that you can use during your stay, but can be kept locked up and out of sight when renters are there.
Before investing, determine what you want out of your property. Are you looking strictly for investment purposes— or do you want a place you can visit again and again? Do you want an investment with solid long-term income potential— or are you looking for a year or two turnaround? Answering these questions before you buy will go a long way in helping you make the right choice.
4. It’s a breeze to manage.
Hire a respected, local vacation rental management company and watch the profits roll in, while you do nearly nothing. Maximize your return by leaving your property open and available during high season times and making any suggested repairs or upgrades that the management team recommends. Then sit back and collect your check every month. Yup— it’s that simple.
A good property management company can also help you with local licensing requirements, marketing of your property, on-going maintenance tasks, utility payments, annual tax and insurance payments, and year-end statements for income tax reporting purposes.
The best way to check out a vacation home before you buy it? Rent it yourself. If you’ve had your eye on a place, consider renting it out for a few days and see what you think. You’ll be surprised at how eye-opening even a short stay can be. Does the home feel clean, comfortable and inviting? Is there any well-hidden deferred maintenance? Is the location convenient to local attractions? How was the property management company to work with? If you buy the home, would you consider hiring them to manage the home for you?
Pro Tip: Look closely at past reviews of the house from former guests and see what they have to say. This will give you important insight into areas of the home you may have to upgrade to provide the maximum return.
Buy The Keys
With proper guidance, buying a vacation rental home in Key West can be a smart and rewarding experience. Let the team at Buy The Keys/Vacasa Florida LLC help you in choosing a vacation rental investment that matches your vision and budget. Our crew has experience in vacation rental operations, management, and sales, making us a one-stop-shop for all your vacation rental home needs.
Drop us a line or give us a call at 305.916.9020 today, and let us help you buy your investment property in paradise.