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Thursday, July 3, 2008

Licensed to Make Money

Many people dream of buying a really charming home in Key West with a pool that they can eventually retire to. But in the meantime they want to be able to rent the house to help make the mortgage payments. Sounds easy. It isn't.

The City of Key West has a transient rental license ordinance that prescribes how single family homes, condos, and town homes may be rented on a transient (daily) basis. The city fathers created a map of locations with existing transient licenses and carved those areas as being permissible. Individual properties that had a transient license were allowed to continue to rent on a transient basis. Residences in permissible areas may rent on a transient basis if they have a license. Residences without a transient license may not. Furthermore, you can't just go to the city to buy a license because they don't issue new ones. Some transient licenses are offered for sale from time to time in our mls. So having a single family home with a transient license, even if you do not want to rent the house that way, the license is a valuable asset to have for re-sale at a later date.

There are two houses interested buyers should consider. The first is a new listing at 1307 Royal Street. It is a really cute property that is loaded with options! The front house has 2 bedrooms and 2 baths, and is in exceptional condition with cathedral ceilings, a heated pool, roll down storm shutters, off street parking and a TRANSIENT license. The back house is a legal 1 bedroom 1 bath cottage which can become completely private and separated by a rolling fence. The property is priced at the June 2008 appraised price.

1307 Royal Street is a five block walk to Upper Duval. El Siboney Cuban Restaurant is located a couple of blocks to the east. The asking price on this property 1438 sq ft property is $1,200,000 or $834 per sq ft. CLICK HERE for additional detailed information and photos.

Then there is 523 Louisa Street. It is just a hop, skin, and a jump off of Upper Duval. It is offered furnished. CLICK HERE to preview this charming abode of 3 bedrooms, 2 baths with 1080 sq ft of living space. It is priced at $1,195,000 or $1,106 per sq ft. Great rental history on this cute story and one-half conch house renovated in 2000 with new roof in 2007. First floor contains open living/dining/kitchen with a bedroom and en-suite bath. Upstairs is two bedrooms with adjoining bath between. Small lagoon style, black bottom heated pool added in 2003. Turn-key property. Strong advanced bookings for buyer to start with immediate cash flow. CLICK HERE to checkout the rental company's listing page for Lousia. And CLICK HERE to preview the advanced bookings that Louisa has in place.

Now it is permissible to rent a single family home, condo, or town home as a legal vacation rental. Such properties may be rented only once per month whether it is for one day or thirty days. That is why having a home with a transient license might be the better investment. I encourage prospective buyers to look at the websites of property management companies like RENT KEY WEST and AT HOME IN KEY WEST. Do the math. You'll be surpirised how profitable owning a house with a transient rental license can be.

If you are looking to purchase home in Key West that you can rent to help make your dream come true, please call me, Gary Thomas, 305-766-2642, or e-mail me at


Anonymous said...

Why do you continue to promote these outrageously overpriced properties? I mean really, one property over $800/sq.ft. and the other (incredibly) over $1,100 sq.ft. You do know, don't you, that the majority of properties that closed in the month of June 2008 in Key West sold for LESS THAN $300 SQ.FT. Please stop with this disinformation. You are losing all credibility.

Gary Thomas said...

Look right below this post and see what I wrote about the first six months of sales in Key West.

Most of the properties that sold were cheap condos and town homes, or single family houses in New Town that flooded. There were a few high end properties that sold that made the numbers look good.

Stuff in the middle is not selling. But junk at $300 per sq ft does not make all properties worth that same amount.

I stand by what I write. I am not a paid cheerleader, either.


Anonymous said...

More disinformation. Let's look at, according to your post, the "junk at $300 per sq ft."
922 Eaton, sold for $1M, $263 sq ft.
709 Windsor Ln, sold for $1M, $298 sq ft.
1316 Johnson, sold for $670,000, $297 sq ft.
Even "high end" 41-B Sunset Key, sold for $725 sq ft, which is less than the 2 properties in this post.
Sure, there were some properties that sold for more. But the ones I have listed are solid, well located properties and, except for Sunset Key, all sold for LESS THAN $300 SQ FT.
Don't be so defensive. My point is only that when a property is listed at above market value please point that out. You will gain (earn) more credibilty from your readers. And I won't have to spend so much time pointing out the opposing view.

Gary Thomas said...

Windsor Lane was a short sale and a tragedy of a house.
Eaton Street was apts with scooters in front yard and low rents.
I Johnson flooded in Wilma and not a particularly good block. Rental units again--and low rents again. Difficult sell indeed.

Every property that is listed
for sale is listed "For Sale" for a reason. Especially in this market.

The point of today's blog is to alert buyers (who want to find someone to help them make their mortgage payments) about two nice houses in acceptable locations that two such houses exist. After all, they are licensed to make money.

I think Royal will probably sell under $900,000 and that the owner of Louisa will hold out for near the asking price.

We will see................


Anonymous said...

Sounds like another blogger Gary coming to roost at your perch. If he won't post his or her name, I wouldn't let it stay in the barnyard.


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Key West, Florida, United States
I first read about Key West in a magazine called "After Dark" sometime in the mid 1970's. But it wasn't until March 1984 that I made my first visit to the island that would become my home. I had two weeks for a vacation and reserved a room at Colours Guesthouse (now Marrero's Guest House) for one week. I thought that if I didn't like Key West, I could always go back to Miami or Ft. Lauderdale for the rest of my trip. But after a couple of days in Key West, that was no longer a consideration. But when I wanted to extend my stay for the extra week I found there was no room at the inn. The guesthouse owner did find me a room at LaTeDa, the infamous guesthouse/restaurant. That's a story I'll write another day. But those two weeks in Key West gave me the realization that I had found Paradise. Key West has been my home since 1993 and my only regret is that it took me so long to get here. I am a full time Realtor at Preferred Properties CRI. Let me help you find your new home or business in Paradise. Living in Paradise is not a slogan, it's a way of life.