The Keys have some of the strictest vacation rental rules in Florida, they vary street by street, and the permits often die at closing. Here is the 2026 rulebook by jurisdiction, the traps hiding in listings with great Airbnb history, and how rental legality changes the loan you can get.
Every Keys jurisdiction runs its own regime on top of state licensing, and the differences are decisive for a buyer counting on rental income:
| Jurisdiction | Shortest legal stay | What it takes |
|---|---|---|
| Unincorporated Monroe County | 28 days by default; 7 days with a permit, only in eligible districts | Annual Special Vacation Rental Permit, allowed only in SR, MU, UR, IS-V and OS land-use districts; prohibited in IS, URM and IS-M. Permit is nontransferable and ends at sale |
| Key West | Nightly, but only with a grandfathered transient license; otherwise 29+ days | City transient rental license attached to the unit; no new licenses issued; transfer at sale requires the city's formal process |
| Marathon | 7 nights with a city license; under 7 nights prohibited | City vacation rental license, owner or agent training, fire inspection, state compliance |
| Islamorada | 7 days in residential zones; 28+ days needs no vacation rental license | Annual village license, capped village-wide at 331, plus state lodging license and fire inspection |
On top of any local permit: a Florida DBPR vacation rental license for stays under 30 days offered more than three times a year, state sales tax registration, and Monroe County Tourist Development Tax registration. Rules and caps change; confirm the current requirements for the specific parcel with the municipality before you rely on them.
Trap one: the income was never legal. Plenty of Keys listings advertise Airbnb history on parcels in IS or URM districts where vacation rental use is prohibited, and those districts cover a large share of the canal-front subdivisions buyers love. Past income proves nothing about your right to continue, and the county enforces. The parcel's land-use district, checked with Monroe County Planning, is the first question, not the last.
Trap two: the permit dies at closing. Monroe County's Special Vacation Rental Permit is nontransferable: a sale terminates it and you must apply fresh, qualifying district and all. Key West transient licenses transfer only through the city's formal process, and Islamorada's licenses are capped village-wide. Make license verification and successful transfer a written condition of the contract.
Trap three: the HOA outranks the city. Even where the jurisdiction allows rentals, condo and HOA documents can impose longer minimums or outright bans, and they control. Read the governing documents before removing contingencies. The state is not riding to the rescue either: the Keys' strict rules survive Florida's preemption law because they predate June 2011, the 2024 preemption bill was vetoed, and the 2025 and 2026 sessions changed nothing.
This is the part most buyers meet too late. On a DSCR loan, the lender counts the income the property can legally produce. Where weekly rentals are legal and documented, many DSCR lenders will use short-term rental history or market projections, typically with an expense haircut, higher reserves, and coverage minimums around 1.0 to 1.25. Where only monthly rentals are legal, which is the default across most of unincorporated Monroe County, careful underwriting uses long-term market rent, and Keys long-term rent is usually far below the advertised short-term gross.
A deal that pencils on illegal weekly income can fail on legal monthly rent, which is why we check the district before running numbers in the DSCR calculator. Occupancy type matters just as much: second-home financing offers better terms but requires genuine personal use, while a property bought to run as a rental business is an investment loan. Misstating occupancy is mortgage fraud, full stop. Our Keys vacation rental financing guide and DSCR loan guide cover the loan mechanics in depth.
Monthly rentals of 28 days or more are legal in essentially every residential area of unincorporated Monroe County and Islamorada with no vacation rental license, and 29 or more days in Key West. Keys snowbird demand makes seasonal monthly rentals a genuine income strategy, it underwrites cleanly on long-term rent, and it removes the entire permit-and-district gamble. For many buyers the honest comparison is a monthly-rental deal that finances today versus a weekly-rental thesis that depends on a permit you do not yet hold.
Send me the address. I will check the land-use district and license angle, then run the numbers on the income a lender can actually count, before you write the offer.
Almost never, outside of licensed properties. Key West requires a grandfathered transient license for stays of 28 days or less and no new ones are issued. Marathon and Islamorada set a 7-night minimum for licensed rentals, and unincorporated Monroe County does not allow rentals under 7 days at all. Nightly hosting is limited to a small pool of already-licensed properties.
Monthly rentals of 28 days or more are legal in essentially every residential area of unincorporated Monroe County and Islamorada without a vacation rental license, and 29 plus days in Key West. Snowbird season demand makes this a real strategy in the Keys. You still may need state and tax registrations depending on how you operate, so confirm with the county and DBPR.
Not necessarily. The prior owner may have been operating without required permits, and past income never transfers a legal right to you. Check the parcel's land use district with the county or city, confirm whether a permit or license exists, and remember that Monroe County permits end at sale. Treat advertised short-term rental income as unverified until the municipality confirms the use is allowed.
Sometimes, and only through the city's formal transfer process for properly grandfathered units. Published sources conflict on how automatic this is, so verify the specific license with Key West Community Development and make a successful transfer a written condition of your purchase contract. Never assume the license comes with the deed.
It changes what income a lender can count. If weekly rentals are legal and documented, some DSCR lenders qualify you on short-term rental income, usually with stricter reserves and coverage requirements. If only monthly rentals are legal, careful lenders use long-term market rent, which is lower, so the property must cash flow on that number. And a home bought mainly to rent should be financed as an investment property, not a second home.
It has not happened yet. The Keys' rules survive because they predate Florida's June 2011 preemption law. A 2024 bill that would have shifted more control to the state was vetoed, the 2025 session passed nothing on vacation rentals, and the 2026 session's related measure died in March 2026. Rules can change, so check for new legislation before you buy.
Tell me where to reach you and which property you are watching. I will map the district, the license situation, and the financing built on income a lender can actually count.
Check my propertyCoastal Florida mortgage broker financing Keys investment and second-home purchases, where rental legality decides the loan as often as the rate does. I check the district and license before running numbers, so the income on your loan is income you can legally earn. Licensed in Florida.
Educational information only, verified against the sources above as of August 26, 2026. Rental rules, districts, caps and license procedures change and are enforced parcel by parcel; confirm current requirements with the relevant municipality, and review HOA and condo documents, before relying on them. This is not legal advice and not a commitment to lend. All loans are subject to credit approval, underwriting and property eligibility. Eli Sanderlin, NMLS #1983384, through Coast2Coast Mortgage, LLC, NMLS #376205. Equal Housing Opportunity.