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Buying vs. Renting: Making the Right Choice in Islamorada’s Real Estate Market

Aerial View Islamorada

Islamorada, also known as The Village of Islands, is a paradise in the fabulous Florida Keys. This stunning destination stretches over 6 islands, each with its own distinctive features and charm. One of the more popular tourist spots in the Florida Keys largely owing to its natural beauty, Islamorada is home to many outdoor destinations like Anne’s Beach and Windley Key Fossil Reef Geological State Park. It is also known as the “Sport Fishing Capital of the World” due to the rich marine life found in its serene waters.

It’s a place that makes a great home with some exceptional luxury properties. But if you are looking for an amazing beachside living experience in the Florida Keys, what real estate options in Islamorada should you consider?

Here, we’ll explore the pros and cons of buying vs renting in Islamorada as well as examine the real estate market in general. We’ll also take a look and some of the wonderful neighborhoods in Islamorada to help you decide not only what sort of investment you should make, but where to make it.

Pros of Buying a Property in Islamorada

High Investment Potential

Buying real estate in Islamorada can be an excellent investment given its prime location in the Florida Keys. Investing here opens the strong possibility of building equity and wealth through homeownership despite high upfront costs like the down payment and insurance fees.

The average listed home value in Islamorada as of June 2023 was $1,950,000 with the average price of a home sold at $2,075,000. This may mark an important turning point in Islamorada’s real estate market. June 2023 was the first time since September 2022 when the median sold price was higher than the median listing price. Clearly, the higher interest rates brought in by the Federal Bank in 2022 caused a correction in the Islamorada market, and for a few months homes sold for considerably less than what sellers were asking for them. This change in June 2023 suggests that Islamorada is recovering quickly, even with prolonged high-interest rates, and that in the long term, Islamorada is set to be a location that sees strong appreciation.

Great Tax Incentives

While the property tax rate in Florida varies per county, the statewide average is 0.80% of a home’s value. As part of Monroe County, Islamorada homeowners enjoy a rate of 0.53%, lower than the tax rates in nearby counties like Miami-Dade (1.02%) and Collier (0.83%). If you own a beautiful waterfront home in Islamorada valued at $1 million, this means you’ll only need to pay property tax of $5,300 per year.

Keep in mind that tax statements are usually mailed out on or before November 1 of each year, with the gross amount due by March 31 of the following year. This gives homeowners more than enough time to settle payments. There are also discounts of up to 4% for early payments of at least a month before the due date.

In addition, Florida is one of only nine states in the US with no state income tax. This can have a massive effect on what is left in your pocket at the end of each year. Those who have investments that bring in substantial returns each year will be able to keep 100% of that revenue.

The state of Florida relies considerably (though not solely) on property tax to help fund city programs and works, however, if you invest in Islamorada you get to enjoy a great Keys lifestyle while paying relatively low property tax and no personal income tax.

Potential for Rental Income

If you do not plan to occupy your Islamorada property year-round, renting it out is a great way to generate income. With premium locations and high-end builds, luxurious waterfront homes being sold in Islamorada are among the most sought-after properties in Florida.

Notably, many of these properties provide easy access to the water like private docks, boosting rental value. Across the Florida Keys, the prices of vacation rentals usually peak in December with the highest rental price at about $748 per night. Rental prices average around $429 per night during the low tourist season from July to October.

Islamorada realtor closing a deal with her client

If your primary objective is to rent out your property in Islamorada then you may want to consider the services of a property manager who’ll take care of the day-to-day running and maintenance of the property. This includes cleaning after a guest or tenant has vacated and preparing it for a new one. A property manager can also help market the property, vet tenants, collect rent, and generally leave you hands-free to enjoy your monthly income.

Freedom to Customize

As a homeowner, you will have full control over renovating your property. This allows you to create a space that suits your lifestyle and needs, allowing you to truly call it your own.

Being Part of a Community

Being a homeowner can bring a sense of belonging in the exclusive community of Islamorada. This creates many opportunities to build connections with other homeowners, as well as take part in cultural events.

Considerations When Buying a Property in Islamorada

High Upfront and Maintenance Costs

Buying a home requires a significant upfront investment for expenses like the down payment, closing costs, and appraisal fees. This can be a major barrier for many homebuyers, especially in high-demand communities like Islamorada, where home values tend to be higher than other Florida Keys areas like Key Largo and Key West.

There’s also the need to purchase flood insurance, something you’ll want to make sure of, especially if you have a waterfront home. Then there’s the fact that waterfront homes often require a little more attention and maintenance than standard homes. Though maintenance is not overly taxing, nor particularly expensive, it should still be factored in before you decide to progress with any home purchase.

Market Fluctuations

While Islamorada’s real estate market is highly desirable, keep in mind that property values can change depending on factors like market conditions and supply and demand. This means that property values may go down, impacting your investment or ability to sell in the future. Bear in mind this is true of almost any area, and Islamorada has seen relative market stability over the past few years.

Pros of Renting in Islamorada

Flexible Living

Being a renter in Islamorada allows you to enjoy beachside living without the lengthy commitments associated with buying Islamorada real estate. Renting gives more freedom in terms of living arrangements compared to buying and is a sound choice for people who may be unsure about staying in a specific property for the long term.

It’s entirely feasible to first rent in Islamorada to get your toes wet, and then if you find the temperature to your liking, then jump all in and buy a property.


It may be that you’re not yet in a position to buy a home but still wish to try living in Islamorada. This is relatively easy as there are many rentals in Islamorada and note that renters are often not responsible for expenses relating to maintenance and repairs, making it as easy as staying in the area without any of the ownership responsibilities and liabilities.

As of June 2023, a 3-bedroom home in Islamorada cost around $5,800 a month. A 4-bedroom home costs around $8,000 as of June 2023, up 20% from the start of the year and highlighting higher demand for large properties in the area.

Considerations When Renting in Islamorada

Restrictions on Customization

Renters usually have limited control over what changes or renovations they can make to a property. From painting walls to modifying roofs, you will typically need prior approval. Apart from physical customizations, landlords can also impose certain limits on things like pet ownership or the number of guests allowed at one time. All of these restrictions can affect your ability to make the space truly feel like home.

Rental Costs Can Go Up Over Time

While renting offers easier short-term access to a home than buying, keep in mind that rent prices are not fixed and can and often do increase over time. This could prove an annoyance or even a difficulty if you’ve fallen in love with a place you’ve been living in only to then find that the rents are increasing due to increasing demand in the area.

In Islamorada, an ordinance requires that landlords who intend the increase the rent of monthly tenants by more than 5%, must provide at least 60 days notice. Previously, it had only been 15. While renters do enjoy better protection than before, they are always open to the possibility that a landlord will increase their rent at the end of their lease. Note also that there is no ceiling for rent increases in Florida. A landlord may increase the price of the rent on their property to however much they want, as long as they provide adequate notice.

Limited Long-Term Financial Benefits

Unlike homeownership, there are little to no long-term financial benefits when it comes to renting. You may be able to save some money from not having to pay a large monthly mortgage and maintenance costs but ultimately, you are helping to pay for someone else’s investment.

Islamorada real estate owners have the benefit of having property in a highly desirable location where home values have appreciated significantly over the last decade.

Islamorada’s Flourishing Real Estate Market

From luxury single-family homes to elegant estates in exclusive neighborhoods, there is a wide selection of homes for sale in Islamorada. You will find several sporting a range of premier amenities like upscale kitchens and bathrooms, stylish outdoor living rooms, and backyard swimming pools.

Islamorada beachfront homes for sale

These premier homes come in a multitude of architectural styles. These include Spanish-inspired estates with smooth stucco exteriors and warm earth tones that exude comfort and style. You will also see modern homes with sleek and upscale finishes that look striking by the water.

You can discover these gorgeous properties lining the coasts of Islamorada. Some of the most desirable communities in Islamorada include:

Plantation Key

Named after an abundant pineapple plantation formerly located on the island, Plantation Key is an enticing choice for those looking to live away from the hustle and bustle of city life. It offers an inviting atmosphere with a good mix of inland and waterfront real estate offering fantastic ocean views. While life is slower and calmer in this neighborhood, leisure and fun are never far away. Plantation Key’s crystal-clear waters make it perfect for water activities like fishing, boating, and snorkeling.

Lower Matecumbe Key

This neighborhood is dotted with premium waterfront houses that accentuate the natural beauty of its beautiful beaches. The area is also filled with gorgeous beach resorts, beachfront restaurants, and other various beach establishments that add to the allure of a bona fide beach getaway. One of the most popular destinations in Lower Matecumbe Key is Anne’s Beach, a white sand beach offering plenty of opportunities for exciting water sports like windsurfing or relaxing activities like picnicking.

Windley Key

With a friendly community, picturesque views, and a steady ocean breeze, Windley Key has all the makings of an idyllic seaside neighborhood. The waterfront homes here are some of the most luxurious in all of Islamorada, with many having private marinas that make them prime properties for those looking to make the most of seaside living. It is home to popular tourist attractions such as the marine park Theater of the Sea and historic outdoor destination Windley Key Fossil Reef Geological State Park.

Buy Premier Islamorada Real Estate with Angel DiGiorgio

Whether you are looking to buy your first luxury home in Islamorada or anywhere else in the fabulous Florida Keys, there is no better real estate agent to turn to than Angel DiGiorgio. Angel has lived in the Florida Keys for over 25 years and has used her extensive knowledge of the area to help several clients make the area their new home.

Islamorada realtor shaking the hand of her client

Always ensuring that her clients get the most out of their real estate investments, Angel brings outstanding client service, 24/7 availability, and a personal touch. To Angel, it is a privilege to work with every client that puts their faith in her.

Start strong and begin your buying journey in the Florida Keys with Angel DiGiorgio. You can contact Angel at 305.509.0971 or send her a message here.