Know the insurance costs, building permit limits and rental rules before you buy your island home.
Reviewed and updated October 3, 2026 by Ryan and Megan Winslow, Winslow Homes
The Florida Keys sell a dream: turquoise water, sunsets, boats and a slower pace. The rules and costs behind that dream are different from anywhere else in Florida. Insurance runs high, new building is tightly limited and rental rules change from one island to the next.
Ryan and Megan Winslow are broker owners, REALTORS® since 2009, with more than 3,000 homes sold. They are also Mortgage Bankers with The Federal Savings Bank. This guide walks you through what to check before you buy in the Keys in 2026.
Buyers have more say than they did a few years ago. You have room to negotiate, but only if you understand the insurance, permit and rental facts that drive value here.
Wind is the largest insurance cost in the Keys. Many homes carry wind coverage through Citizens Property Insurance Corporation, Florida's insurer of last resort.
Construction drives your quote. Concrete block homes, newer roofs, impact windows and shutters and elevated living areas all lower wind premiums. Ask for a wind mitigation report on every home you consider. Older wood frame conch houses carry charm, but their insurance costs need a close look.
Plan on it. Homeowners policies exclude flood (source, checked October 2026), and most of the Keys sits low.
If you insure wind through Citizens, flood coverage is now required for residential policyholders, except condo unit owners. The requirement covers all remaining qualifying homes for renewals effective on or after January 1, 2027 (source, checked October 2026).
A National Flood Insurance Program policy on a single-family home covers up to $250,000 for the building and $100,000 for contents (source, checked October 2026). For a million dollar home, those limits fall short. Ask about excess flood coverage or a private flood policy with higher limits.
Before you make an offer, collect the flood zone, the elevation certificate and the seller's current flood premium. Homes built below today's flood elevation often cost far more to insure than elevated homes next door.
The Keys limit new homes through the Rate of Growth Ordinance (ROGO) in unincorporated Monroe County and similar systems in the island cities. To build a new home, you need a building permit allocation. A vacant lot without a path to an allocation holds far less value than a lot with one.
What this means for you: buying an existing home is simpler than building. If you buy a lot, confirm its ROGO status, its environmental scoring and its place in line before you close. If you buy a home to tear down and rebuild, confirm the existing unit is lawfully recognized so you keep the right to rebuild.
Rental income drives many Keys purchases. The rules are strict, and they depend on where the home sits.
Unincorporated Monroe County. The county defines a vacation rental as a dwelling rented for less than 28 days (source, Monroe County document dated July 2017). You need an annual vacation rental permit, which does not transfer to a new owner, and a licensed vacation rental manager (source, July 2017). Rentals are allowed with a permit in some zones, such as Suburban Residential, Urban Residential and Mixed Use, and banned in others (source, July 2017).
Key West. Most residential areas carry a 30-day minimum, and nightly or weekly rentals need a transient license, which is limited in number (source, 2026 rental guide). Key West has also ended special arrangements. Transient rental privileges for about 300 Truman Annex owners expired December 22, 2025, after a 20-year agreement, and those homes moved to a 30-day minimum (source, December 2025).
Marathon and Islamorada. A 2026 broker guide describes a 7-day minimum in many Marathon zones and a 7-day minimum with a special license in Islamorada residential areas (source, 2026 rental guide). Always confirm with the city.
Never rely on a listing that says rental friendly. Ask for the license or permit, confirm it transfers or is reissued to you and check the zoning yourself.
Many Keys buyers choose condos for lower upkeep. Florida law adds steps for older buildings.
Read the association's rental rules too. Many Keys condos set their own minimum stays, guest limits and pet rules on top of city and county law. Review the budget, the reserves, the insurance and any planned assessments before you sign.
Lenders look closely at insurance, flood zones and condo finances in the Keys. A strong pre-approval accounts for all of them up front. Ryan and Megan are Mortgage Bankers with The Federal Savings Bank, so they help you build your payment with real insurance numbers, not guesses. Try the down payment program matcher to see programs you qualify for. Buyers comparing the Keys with mainland South Florida should also read the Miami real estate page.
The median Keys closed price was $1,010,000 in September 2026, up 15.1% from a year earlier (source, September 2026).
One 2026 analysis estimated about $6,390 per year for a typical $949,386 Key West home, with a range of about $3,834 to $10,224 or more (source, checked October 2026). Flood coverage is extra.
It depends on the address. Unincorporated Monroe County requires a permit and a licensed manager for stays under 28 days (source, July 2017), and most Key West residential areas carry a 30-day minimum without a transient license (source, 2026 rental guide).
You need a building permit allocation to build a new home. The Keys received 900 new allocations to spread over at least 10 years, and Monroe County planned to issue 40 per year (source, December 2025).
Yes. Buildings three or more stories tall need milestone inspections at 30 years and every 10 years after, plus a structural integrity reserve study every 10 years (source, August 2025).
Call Ryan and Megan at 386-690-5858 or book a consultation. They help you check insurance, permits and rental rules before you fall in love with a view.
