Buying a Short-Term Rental in Islamorada, FL
This site's Florida Keys hub page already makes the single most important structural point for any rental-investment buyer in Monroe County: short-term rental rules are not chain-wide. Each of the five incorporated Keys municipalities -- Key West, Marathon, Islamorada, Key Colony Beach, and Layton -- sets its own ordinance, and unincorporated county land runs under yet another set of rules. Islamorada, Village of Islands, is one of those five, which means it has the legal authority to set its own short-term rental licensing, zoning, and caps, separate from whatever Key West does and separate from the county's rules for unincorporated Key Largo just up the highway. What this page cannot do is hand you Islamorada's specific current short-term rental ordinance -- this research pass found the Village's own site (islamorada.fl.us) as the authoritative source for that ordinance, but did not confirm its current license-cap structure, zoning restrictions, minimum-stay rules, or enforcement posture through a direct, current read of the ordinance text. Rather than guess at rules and present them as fact, this page states that gap honestly, covers what genuinely is confirmed about Islamorada's own local growth-control system (BPAS) and its demand-side appeal as a sport-fishing destination, and tells you exactly who to call before you assume any specific STR rule applies to a property here.
Islamorada Sets Its Own STR Rules -- and This Research Could Not Confirm What They Currently Are
Because Islamorada is an incorporated Village with its own Building Department and Village Council, it has the same kind of legal standing Key West has to run its own short-term rental system on top of Florida's statewide floor under Section 509.032(7)(b) -- the 2011 law that keeps any Florida local government from banning vacation rentals outright, while still leaving room for local registration, licensing, occupancy, and zoning rules. Key West's own page on this site documents that city's capped, license-based transient rental system in detail. This page does not do the same for Islamorada, and it will not invent numbers to fill that gap: whether Islamorada currently caps the number of short-term rental licenses, restricts short-term rentals to specific zoning districts, sets a minimum stay length, or requires a Village-specific registration on top of the state DBPR license were all things this research could not verify through a direct, current read of the Village's own ordinance text this pass.
That is a meaningfully different, and more honest, starting point than most rental-market guides will give you. Treat any specific STR license cap, zoning map, or minimum-night rule you see quoted for Islamorada on a brokerage site, a compliance-service blog, or a short-term rental aggregator as unconfirmed until the Village of Islamorada's own Building Department or Village Clerk confirms it in writing for the specific parcel you are considering. Do not assume Islamorada's rules mirror Key West's capped-license system, and do not assume they are more permissive just because this page could not find a specific cap -- the honest answer is that the current rule set needs to be pulled directly from the source, not inferred from a neighboring municipality.
Call the Village Building Department and Village Clerk Before You Assume Anything
Before treating short-term rental income as part of your purchase math for any specific Islamorada address, contact the Village of Islamorada's Building Department and Village Clerk's office directly and ask, in writing: is short-term rental use (however the Village currently defines it -- often a stay under a specific number of days) currently permitted at this parcel; is there a Village-specific rental license, permit, or registration requirement separate from the state DBPR license; does a numeric cap or waitlist currently exist, and if so does this property already hold an active claim to a license; is short-term rental use restricted to particular zoning districts or overlay areas within the Village; and has any ordinance change been proposed or adopted recently that would affect the answer. These are the same categories of question Key West's own page on this site tells buyers to confirm with that city's licensing office -- the difference here is that this page cannot tell you what Islamorada's current answers are, only that they need to be gotten directly rather than assumed.
A Florida-licensed real estate attorney with Keys-specific -- ideally Islamorada-specific -- experience is worth engaging before you remove an inspection or financing contingency on a property you plan to rent short-term. General Keys STR familiarity built around Key West's or Marathon's rules does not necessarily transfer to Islamorada's own ordinance, precisely because each municipality here runs its own system.
BPAS and the Village's Residential Moratorium Can Affect Your Ability to Build New Rental Inventory
Separate from whatever Islamorada's short-term rental licensing rules turn out to be, the Village runs its own Building Permit Allocation System (BPAS) -- a local growth-management mechanism distinct from Monroe County's chain-wide ROGO/NROGO framework already covered on this site's Florida Keys hub page. The Village Council passed Ordinance 23-10 (2023) establishing a moratorium on new residential building-permit applications, later extended by Ordinance 24-12 (2024); both are real, currently-documented ordinances covered by local outlet Keys Weekly. If your rental-investment plan depends on building new construction, a knockdown-rebuild, or a substantial addition to create or expand short-term rental capacity anywhere in Islamorada -- as opposed to buying an existing, already-licensed structure -- this moratorium is directly relevant to whether that plan is even possible on the timeline you expect, independent of whatever the Village's rental-licensing rules say about an existing unit.
This page cannot tell you whether the moratorium is still in effect as of the date you are reading this, or how it currently interacts with Florida Senate Bill 180 (2025), a state law reported by legal-industry analysis (Bilzin Sumberg) to restrict local governments' ability to impose building moratoria. Ordinance status changes, and this research reflects Ordinance 23-10 and its 24-12 extension only as documented at the time of this research -- not necessarily current status. Confirm the moratorium's current scope and status directly with the Village of Islamorada's Building Department before assuming any new-construction path to rental inventory here, in addition to confirming the separate short-term-rental licensing questions above.
Why Islamorada Draws Rental Demand: The Sport Fishing Capital of the World
Whatever the specific licensing rules turn out to be, Islamorada's underlying appeal as a rental market is real and distinctive within the Keys chain. The Village markets itself as the "Sport Fishing Capital of the World," a widely-used and long-standing identity backed by real, specific institutions rather than just a slogan: the Islamorada Fishing Club, a long-standing club with its own documented history; the Islamorada Sailfish Tournament and a separate junior sailfish tournament; and Bud N' Mary's Marina, a historic charter-fleet anchor for offshore bluewater fishing. Islamorada genuinely sits at the intersection of three distinct fishing environments -- backcountry/flats guiding into Florida Bay and the Everglades boundary, oceanside reef fishing, and offshore bluewater/deep-sea charters -- a real three-way distinction that draws a dedicated, repeat visitor base of anglers and charter clients who are a different demand pool than a general beach-vacation renter.
This page does not state an occupancy rate, average daily rate, or any specific rental-income figure for Islamorada -- no platform-level rental-performance data (AirDNA, Rabbu, AirROI, or similar) was gathered for this page, consistent with this site's Florida Keys hub page. The fishing-tourism draw described here is a genuine demand driver worth knowing about qualitatively; it is not a substitute for pulling current occupancy and rate data from a rental-performance platform or a local property manager before underwriting a specific property's rental income.
Taxes and the Statewide Layer That Applies Regardless of Village-Specific Rules
Whatever Islamorada's own licensing system requires, a handful of statewide and county-level tax obligations apply to any legal short-term rental here the same way they do elsewhere in the Keys: a Florida Department of Business and Professional Regulation (DBPR) transient public lodging license, Florida's 6% state sales tax on rental income, and Monroe County's Tourist Development Tax (bed tax) on stays under six months, collected through the Monroe County Tax Collector. This page did not independently confirm the exact current combined Monroe County bed tax rate, and it did not confirm whether Islamorada layers any additional Village-specific rental tax or fee on top of those county and state obligations -- confirm both directly with the Monroe County Tax Collector and the Village's own Building Department or Village Clerk before building a rental pro forma.
A property's condominium or homeowners' association can also independently restrict or ban short-term rentals through its own recorded declaration, entirely separate from whatever the Village allows -- this research did not catalog any specific Islamorada building's or community's declaration language. Pull the specific property's governing documents, if any apply, before assuming rental potential from a listing or a verbal assurance.
What This Page Confirmed, What It Didn't, and What That Means for a Buyer
Confirmed: Islamorada is one of five incorporated Monroe County municipalities with the legal authority to set its own short-term rental rules, separate from Key West's and the county's; the Village runs its own Building Permit Allocation System and passed a residential-permit moratorium under Ordinance 23-10 (2023), extended by Ordinance 24-12 (2024), that could affect new-construction rental inventory; Islamorada's sport-fishing identity is real and backed by genuine institutions (Islamorada Fishing Club, Bud N' Mary's Marina, the Sailfish Tournament) rather than invented marketing; and the same statewide DBPR licensing, state sales tax, and Monroe County bed tax obligations that apply elsewhere in the Keys apply here too.
Not resolved, and not something this page will invent: the current specifics of Islamorada's own short-term rental ordinance, including any license cap, zoning restriction, minimum-stay rule, or Village-specific registration requirement; whether the BPAS residential-permit moratorium remains in effect today and how it interacts with SB 180 (2025); the exact current combined Monroe County bed tax rate; and any occupancy, rate, or rental-income figures. Before writing an offer with short-term rental income in the plan, get the specific property's current, legal short-term-rental status confirmed in writing by the Village of Islamorada's Building Department and Village Clerk, confirm BPAS/moratorium status for the parcel, confirm the current bed tax rate with the Monroe County Tax Collector, pull any condo or HOA declaration that applies, and have a Florida real estate attorney experienced in Monroe County/Keys -- ideally Islamorada-specific -- transactions, along with a CPA, review the numbers before you buy. Nothing on this page is legal, tax, or investment advice.
Ready to talk to a local Islamorada agent?
Get a Free Agent Referral →Independent research. No ads. No sponsored listings. This page covers only Islamorada-specific vacation-rental-investment content; chain-wide Florida Keys facts -- the five-municipality patchwork, county-wide ROGO/NROGO, and the point that STR rules vary by municipality -- are covered on this site's Florida Keys hub page and not repeated here. Data sourced from: Florida Statute Section 509.032(7)(b) (the 2011 statewide short-term-rental preemption law), consistent with this site's other Florida Keys pages; the Village of Islamorada's own site (islamorada.fl.us) as the authoritative source for Village ordinances, including Ordinance 23-10 (2023) and its extension, Ordinance 24-12 (2024), establishing the residential building-permit moratorium under the Village's Building Permit Allocation System (BPAS); Keys Weekly's coverage of that moratorium; Bilzin Sumberg's legal-industry analysis of Florida Senate Bill 180 (2025) and its tension with local building moratoria; and theislamoradafishingclub.com and budnmarys.com for the Islamorada Fishing Club and Bud N' Mary's Marina as real, documented institutions behind the "Sport Fishing Capital of the World" identity. Honest gaps disclosed rather than filled with invented figures: this research did not confirm, through a direct current read of the Village's own ordinance text, Islamorada's specific current short-term-rental license cap (if any), zoning restrictions, minimum-stay rules, or Village-specific registration requirements -- do not assume these mirror Key West's capped-license system or any other municipality's rules. Whether the BPAS residential-permit moratorium remains in effect as of the current date, and how the SB 180 tension has actually been resolved, if at all, was not independently re-verified for this page. The exact current combined Monroe County Tourist Development Tax (bed tax) rate, any Village-specific rental tax or fee, and any occupancy, average-daily-rate, or rental-income figures (no AirDNA, Rabbu, AirROI, or similar platform data was gathered) were not confirmed and are not stated here. Confirm current short-term-rental rules directly with the Village of Islamorada's Building Department and Village Clerk, BPAS/moratorium status with the same office, current bed tax rates with the Monroe County Tax Collector, and consult a Florida real estate attorney experienced in Monroe County/Keys -- ideally Islamorada-specific -- transactions, along with a CPA and a local property manager, before purchasing a property in Islamorada for rental income. Nothing on this page is legal, tax, investment, or real estate advice.