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Key Colony Beach, FL
Generally Investor Friendly
Local STR Agent
Local STR Agent

Yes, short-term rentals are explicitly allowed in Key Colony Beach, Florida. The city has established a comprehensive regulatory framework specifically for vacation rentals (short-term rentals) that permits their operation with proper licensing and compliance. Key Colony Beach recognizes vacation rentals as a vital component of their tourism economy and has developed detailed regulations to ensure they operate safely and harmoniously within the community.
Key Colony Beach hosts earn a median $56,428/year with $342 ADR and 68% occupancy.
Top performers pull in $81,166+ per year.
See the full Key Colony Beach market breakdownStarting a short-term rental business in Key Colony Beach requires several critical steps and certifications:
Property Manager: Must complete the City of Key Colony Beach's Property Management Class and obtain a Certificate of Completion. The property owner can serve as the Property Manager if desired.
Local Contact: Must also complete the Property Management Class and be within one hour's drive of Key Colony Beach.
Guest Information Sheet Must Be Kept On-Premises: The following information must be maintained in the rental unit and available for inspection:
This comprehensive regulatory framework ensures that short-term rentals in Key Colony Beach operate safely, legally, and in harmony with the local community while supporting the area's tourism economy. Investors should note that the city actively enforces these regulations with daily fines for violations, making compliance essential for successful operations.
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Key Colony Beach is a small oceanfront city in Monroe County, Florida, set in the Middle Florida Keys on a compact chain of islands just east of Marathon. With roughly 800 year-round residents, the city has the feel of a quiet tropical residential enclave, known for its calm canal-lined streets, pastel homes, and easy access to both the Atlantic and the Gulf of Mexico. It serves as a relaxed gateway to the Middle Keys and a natural pause between busier Key Largo, about an hour and a half to the northeast, and Key West, roughly 50 miles to the southwest and reached in about an hour and fifteen minutes. Miami is approximately 110 miles northeast, a drive of around two and a half hours over the Overseas Highway.
Just to the west, where Vaca Cut meets open water, the Seven Mile Bridge carries traffic toward the Lower Keys. The modern span parallels the remains of the old Overseas Railroad bridge, portions of which now serve as a pedestrian and cycling path leading to Pigeon Key, a small historic island that once housed Henry Flagler's railroad workers and is now a learning center. The bridge, the causeway, and the small island beneath together form one of the most photographed stretches of the Keys and are a few minutes' drive from Key Colony Beach.
A short drive east in Marathon, on neighboring Grassy Key, the Dolphin Research Center is a marine mammal education facility where visitors can observe Atlantic bottlenose dolphins and California sea lions in tidal lagoons and take part in guided interaction programs. Also in Marathon, the Turtle Hospital offers behind-the-scenes tours of its rehabilitation work with injured sea turtles, walking guests through recovery tanks, the operating room, and the hospital's long-running conservation efforts. Both venues draw family travelers as well as serious nature enthusiasts exploring the Middle Keys.
Further west along the Overseas Highway, Bahia Honda State Park sits on Bahia Honda Key and is widely regarded as one of the most scenic spots in the Florida Keys. Its shallow turquoise water, white sand, and views of the old Bahia Honda Bridge attract snorkelers, kayakers, and sunbathers year-round, and the park is about a 30-minute drive from Key Colony Beach.
The combination of a small, well-defined residential footprint, a tangle of private canals suited to boating and fishing, and a central position on the Overseas Highway gives Key Colony Beach an enduring appeal for visitors who want a quieter Keys experience without giving up access to the region's signature attractions. Family vacationers, anglers, divers, and seasonal snowbirds all pass through, and the proximity to Marathon, the bridges, and the Lower Keys' natural areas makes the city a particularly flexible base. For owners, that mix of a peaceful setting and a steady flow of travelers heading to well-known landmarks nearby translates into a short-term rental market with broad, year-round appeal.
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