What Can I Buy in the Florida Keys for under $250,000?

It's no secret that the Florida Keys is an expensive place to live. But there are still places you can find under the $250,000 price range.

It may be a small condo, or a small home, and it may or may not be in need repairs and remodeling. In some cases, the homes are un-inhabitable, but since there is already a structure on the land, you can get a permit to build a new home much quicker than if it was just a vacant parcel of land. 

From Key West to Key Largo, here is what is on the market under $250,000.

Click to view listing(s)
(link will no longer be available after 8/22/2019)

Can I Rent That Property I Purchased?

Vacation Rentals. We know they are a popular choice among travelers, or sites like VRBO, HomeAway and AirBnB would not exist.

The Florida Keys are no exception. Many an owner has offered their condo or home for vacation rentals to earn income that can offset the cost of owning and maintaining a home in the Keys. 

But before you start welcoming guests into your home away from home, it's important to know if it is legal to do so. Almost every condo association and single family home owner associations have rules and regulations regarding vacation rentals. In some cases, even in when the association allows rentals, Monroe County may not.

Almost all single family home neighborhoods have restrictions in place that do not allow rentals under 28 days. That's straight forward enough. Some condos have restrictions allow rentals of one month or longer, while some others allow weekly rentals. 

But lately, Monroe County has been taking aim at condo associations, and hitting owners that do short term rentals that the county deems "illegal" with hefty fines.

The county requires two things for each vacation rental: an annual permit and a property manager licensed with Monroe County to manage the rental. Learn more about the two requirements by clicking here. Not having both a permit and a licensed manager will result in a violation. Unless you file for and get an exemption.

There are exceptions that could get you an exemption. A vacation rental permit is not required for the following:  (1) A vacation rental of a dwelling unit located within a controlled access, gated community with a homeowner's or property owner's association that expressly regulates or manages vacation rental uses; or  (2) A vacation rental of a dwelling unit within a multifamily building located within a multifamily district, which has 24 hour on-site management or 24 hour on-site supervision. To meet these on-site management or supervision requirements, a designated individual must be physically located within the building or within 300 feet of the subject building and must be available at all times to respond to tenants' and neighbors' complaints.  You can learn more about the exceptions by clicking here.

To make matters more complicated, incorporated cities within the Monroe County, such as Islamorada and Marathon, have their own set of rules and regulations regarding rentals that must also be adhered to in addition to Monroe County rules. 

For instance, there are condos in the Islamorada area that, according to their condo docs, allow short term vacation rentals. However, the Village of Islamorada has a financial threshold that a property must pass before it would even be considered for a vacation rental permit, much less approved. Even though the condo docs allow rentals, units that aren't assessed high enough for tax purposes do not qualify for a permit to do anything less than 28 days.

Once you've done the background research to see if a property qualifies, you will still need to apply for the proper licenses (not permits) from Monroe County and the State of Florida to remit the collected sales tax each month.  It is required to collect and remit 12.5% sales tax on all rentals under 6 months.  The State of Florida gets 7.5% and Monroe County takes 5%.

There are still plenty of opportunities to own a vacation rental in Monroe County, just as long as you do your research and follow the proper guidelines. When in doubt, check with your real estate professional or speak directly to officials at Monroe County.

How Does 2019 Compare to 2018 in Terms of Sales?

The 2018 real estate market was a fairly brisk market, especially considering that much of the Keys was still recovering from Hurricane Irma in September of 2017.  While it's true that many "investors" flooded the Keys, hoping to buy damaged properties from desperate sellers at bargain prices, many of the homes in the Upper Keys suffered little to minor damage during the storm. Still, many long-time residents chose to leave the Keys permanently.

So far, 2019 has not been as intense as 2018. Investors looking for deals have left to look in other storm damaged areas, such as the Florida Panhandle after Hurricane Michael struck.  Open water home and canal front homes saw a slight reduction in prices, particularly open water homes.

Click to enlarge - Properties MM 70 to MM106

Non-waterfront single family homes is currently one of the most active segments of the market. Often, non-waterfront homes are in neighborhoods with a community boat ramp, making access to boating right from your own neighborhood easy and convenient.

Click to enlarge - Properties MM 70 to MM106

Condominiums have also seen an increase in interest from buyers. Condos appeal to many buyers because they have everything a buyer is looking for - pool, tennis, security, etc. They are also easier to use as a vacation rental unit than a single family home, since most neighborhoods of single family homes restrict the minimum length of legal rentals to be 28 days or longer. But many condos can offer weekly or even daily rentals, making for more potential rental income.

What will the next quarter of 2019 look like compared to 2018. Time will tell, but I believe the market will do fine.

**  The data here is for properties located in the Upper Florida Keys - from Mile Marker 70 to Mile Marker 106 - and is an average of all sales. Each group encompasses a variety of homes, from luxury homes to basic construction. Properties sold both above and below the averages sales prices shown here.

Buyers Beware - the seller of the home you're looking at might be listening

With the ever rising popularity of smart devices such as Amazon's Echo and Alexa, in addition to in-home video surveillance systems, owners of homes on the market may be able to listen in, or even watch, while you tour their home.

Sellers could be listening or watching to see what your reactions and comments are about their home.   Even remarks that you may think are harmless can be used against you.

For instance, if you gush about how much you love the house and can't wait to buy it, that seller will most likely be less inclined to negotiate the price with you, since they know you love it and have to have it.

But what about privacy?

In many ways, when you open your private home to the public, it can be similar to a shopping mall, restaurant, sports arena or any other public space. Allowing the public in can change the dynamics in terms of strength and amount of rights you may or may not have.

Many agents argue that homes that have such devices installed should include a notice or sign indicating that there are recording devices present. Currently, there are no laws that require such notice.

In the meantime, use caution when viewing homes. Sure, you can discuss things with your agent, but be sure to keep them neutral. Leave the serious talk about writing offers or how much you're willing to pay until you are in a place where you know the seller won't be listening.