Financing a Florida Keys short-term rental starts with one question: can the property legally be rented short-term? The Keys are strict and the rules change island to island. Once a property is a legal, permitted rental, a DSCR loan qualifies it on that income. Here is how the rules and financing work.
Financing a Florida Keys Airbnb comes down to one thing before the loan: can the property legally be rented short-term? The Keys are one of the strictest short-term rental markets in Florida, and the rules change from island to island. Once a property is confirmed as a legal, permitted rental, a DSCR loan qualifies it on that income with no tax returns. Here is how the Keys rules and financing actually work.
Call a mortgage broker who checks the rental rules for the exact address before anything else, because in the Keys the permit decides whether the short-term income counts. Unincorporated Monroe County, Islamorada, Marathon, Key West, Key Colony Beach and Layton each set their own minimum stay and license rules, and most permits do not transfer to a buyer. I'm Eli Sanderlin, based on Ramrod Key, and I confirm the permit, run the rental income through a DSCR loan, and quote wind and flood before you write an offer.
Eli Sanderlin | NMLS #1983384 | The Mortgage Dock, Powered by Coast2Coast Mortgage, LLC | NMLS #376205 | Equal Housing Lender
The Keys are grandfathered under Florida's pre-2011 exemption, so Monroe County and its cities can and do restrict short-term rentals by zoning and minimum stay. In unincorporated Monroe County, rentals shorter than 28 days are allowed only in specific zoning districts, and where they are allowed they require an annual Special Vacation Rental Permit with conditions on parking, trash, quiet hours, dock and boat use, and a local rental manager on call.
The cities set their own floors. Licensed rentals in Islamorada (residential subdivisions) and Marathon have a 7-night minimum. Key West treats stays under 30 days, or one calendar month, as transient rentals, which require a state DBPR vacation rental license plus a city transient license, and no new city licenses are being created. A licensed rental can be a real asset where the license can pass to a buyer, as a Key West transient license can for a fee, but in unincorporated Monroe County, Islamorada and Marathon the buyer has to apply for a new permit or license after closing.
The practical rule: never assume a Keys listing can be rented nightly. Verify the zoning, the minimum-stay rule for that island, and whether a transferable permit or license exists before you write the offer. The Keys waterfront investor page and the Keys mortgage hub go deeper on the local markets.
The workhorse is the DSCR loan. It qualifies the property on its rental income instead of your tax returns, closes in an LLC, and needs no W-2 or employment check. Gross rent divided by the full payment is the ratio: 1.0 is break-even, and 1.25 or higher gets the best pricing. Seasonal or lower-ratio deals need more cash in, and most programs want several months of reserves.
For a new purchase with no rental history, lenders use a short-term rental income projection from AirDNA or Rabbu for the specific Florida Keys address, or an appraiser market-rent estimate. If the property already operates as a rental, that history can strengthen the file. High-value waterfront above the conforming limit moves to portfolio jumbo, and self-employed buyers can use a bank statement loan for a personal-residence purchase.
Permitted Keys short-term rentals often carry strong ratios because nightly rates are high and supply is capped, which is exactly the setup a DSCR lender likes. If the permit does not transfer or the property is not a legal short-term rental, the short-term income cannot be used, and we pivot to a long-term rent figure or a second-home structure instead.
One rule that decides everything here: the rental income only counts if the property can legally be rented short-term under the local rules above. That is why I confirm the zoning and permit status of the exact address before we build the DSCR file. Model your own numbers with the DSCR calculator and the investment ROI tool first.
Insurance is the swing factor in the Keys. Wind and flood premiums on VE-zone and older waterfront can be a large line item, and on a DSCR deal a high premium lowers the ratio and shrinks the loan. Flood zone, elevation, and the condition of any seawall or dock all feed into both the appraisal and the insurance quote.
That is the coastal-lending piece most out-of-market lenders miss. I pre-quote wind and flood insurance on every Keys deal and size the DSCR loan around the real number, not an optimistic guess, so the ratio holds up in underwriting and the payment is honest before you commit.
Can I finance an Airbnb in the Florida Keys?
Yes, once the property is confirmed as a legal, permitted short-term rental. Then a DSCR loan qualifies it on the rental income with no tax returns, with an LLC closing available. The Keys are strict, so verify the zoning and permit for the exact address first, because the short-term income only counts if the property can legally be rented that way.
What is the minimum rental period in the Florida Keys?
It varies by location. Unincorporated Monroe County generally requires 28 days unless the property is in a specific zone with a Special Vacation Rental Permit. Licensed rentals in Islamorada (residential subdivisions) and Marathon have a 7-night minimum. Key West treats stays under 30 days, or one calendar month, as transient rentals that need a city transient license, and no new ones are being created. Always confirm the rule for the specific island and address.
Does a Keys vacation rental permit transfer when I buy?
It depends on where the home is. In Key West, a transient license can be transferred to the buyer for a fee of 10 percent of the annual license tax. In Key Colony Beach, the registration can transfer for a fee. In unincorporated Monroe County the Special Vacation Rental Permit is nontransferable and the buyer applies for a new one; in Islamorada the license is retired on an arm's length sale; in Marathon the buyer applies within 30 days. Confirm the exact permit status in writing before closing, because it drives whether the short-term income counts.
How much down payment do I need for a Keys short-term rental?
It depends on the property's rental income ratio, the price and the program. A lower ratio or a higher-value waterfront property usually needs more cash in, and loans above the $990,150 Monroe County conforming limit are jumbo. Most programs also want several months of reserves. Send me the property and I will run the actual numbers.
Why is insurance such a big deal on a Keys rental loan?
Because insurance is part of the payment the lender uses to size the loan. Wind and flood coverage on a VE-zone or older Keys waterfront home can be a large cost, and on a DSCR loan a high premium lowers the ratio and the amount you can borrow. Pricing it early is the difference between a deal that pencils and one that does not.
Tell me where to reach you and which property you are watching. I will check the rental license angle, build in real Keys insurance, and show you the DSCR loan that actually works on it.
Get my DSCR numbersCoastal Florida specialist financing vacation rentals, DSCR investment property, jumbo, and non-warrantable condos across the Keys and both coasts. I fold the real insurance and payment numbers into every deal before you write an offer. Not a lawyer or CPA, confirm short-term rental rules with the city and county. Licensed in Florida.
Send me the property. I will run a DSCR read on the rental income, price the flood and wind insurance, and put the true monthly cost in front of you before you write the offer. 30 minutes.