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MarketsFloridaKey West

Cap Rate Analysis: Key West, FL

Investment metrics, interactive calculators, and data-driven analysis for Key West rental properties.

Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026

Challenging for pure cash flow
Based on $935,000 median price and $3,530/mo median rent
Est. Cap Rate
2.63%
1% Rule
0.38%
Fails
GRM
22.1x
Price / Income
18.5x

Market Data

Median Home Price$935,000
Median Monthly Rent$3,530
Property Tax Rate0.86%
Population50,000
Population Growth1.9% / yr
Median Household Income$50,639
Vacancy Rate5.2%
Annual Appreciation3.7%

Cap Rate Calculator — Key West

Pre-filled with Key West medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.86% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.22%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$20,753
net operating income
Gross Rent Multiplier
22.1x
High (>15)
1% Rule
0.38%
✗ Fails
Monthly Cash Flow
$1,729
before debt service
Annual Breakdown
Gross Rental Income$42,360
Less Vacancy−$2,203
Effective Income$40,157
Less Operating Expenses−$19,404
Net Operating Income$20,753
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Cash-on-Cash Return — Key West

Factor in financing to see your actual return on invested capital in Key West.

$
$233,750
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-11.57%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$261,800
$233,750 down + $28,050 closing
Monthly Mortgage
$4,572
on $701K loan
Monthly Cash Flow
$-2,525
after all expenses
Annual Cash Flow
$-30,296
before taxes
Cash Flow Breakdown
Monthly Rent$3,530
Less Expenses−$1,483
Less Mortgage−$4,572
Monthly Cash Flow$-2,525

Is Key West a Good Place to Invest in Rental Property?

Key West, FL has a population of 50,000 and has been growing at 1.9% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $935,000 paired with median rents of $3,530/mo produces an estimated cap rate of 2.63%.

Property taxes at 0.86% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 18.5x, homes cost about 18.5 times the local median income of $50,639. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 3.7% annually. Above-average appreciation adds an equity component to total returns, though deals should still pencil on cash flow alone.

Bottom line: At current median prices, Key West is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.

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