Key West: Investment Real Estate Redefined

There’s no question that, like the rest of the country, Key West has gone through a sharp decline in real estate. In fact, the real estate recession probably had its impact on Key West sooner than in many other areas. However, it now also seems like Key West is seeing an earlier recovery as well. Some of the earlier signs were with a marked uptick in vacation rentals, at all times of the year, especially in summer. And now, we see an estimated 7% increase in average home purchase prices from a year ago. Inventory is down substantially from this time last year, and we are actually seeing homes being purchased at “above asking” prices.
Meanwhile, vacation rental homes have become a tremendous opportunity for investors. A well-located and nicely furnished home of any size with a transient license has the potential to generate 10-12% of its purchase price in gross rental income every year. An exceptional home with three or more bedrooms can generate even more, as much as 13-15% in gross income. Returns like this have changed the nature of real estate investment, which has always depended primarily on real estate appreciation. With rates and occupancy of vacation rentals presently growing every year, and the attractive tax benefits that come with owning an “active” rental, such a home could in effect pay for itself in less than twelve years. For more information, feel free to call 305.304.1933 or e-mail Chris Santry.

Leave a Reply

Your email address will not be published. Required fields are marked *