Real Estate Broker · Greater Rochester/Finger Lakes Region · Member since 2016 · 61 posts · 63 votes
I'm considering adding a Vacation Rental to my portfolio. I intend to retire to Key West, the Virgin Islands, or possibly Aruba sometime in the next 10-15 years and I'd like to start buying in the area. Does anyone have success stories owning in these areas from afar?
In the VI, I would argue that a number of investment properties trade at higher cap rates than in the States - outsized returns can be achieved as the market in fairly unsophisticated. Short term rentals are typically tight in terms of cash flow, but appreciation is stable and there is a finite amount of land on the rock! Its quite common for people to purchase a villa with intention to retire in a few year, but STR in the interim. I'm a broker in the VI, feel free to reach out if you have further interest in the market.
For the Florida Keys, short-term rentals have been extremely successful. More and more travelers are preferring to stay at a short-term rental property vs. a hotel, especially since Covid. But the Florida Keys alone is the main factor of why it is a preferred destination to visit. There is home inventory available but they do sell quickly due to the demand.
For vacation rentals KW is not so much a waterfront destination as an Old Town/quaint conch house destination. You can be easily over 1mm very quickly for a turn key home in Old Town. Transient rental licenses are a big deal. You could get into the Truman annex or even golf village and probably have less hassles with the home, but you would also lose a bit of charm.