Are condos a good buy in Key West?

Key West condos can be a good buy depending on the buyer's goals, budget, and tolerance for HOA restrictions. They offer a lower entry point into the Key West market than single family homes but come with financing complexity, rental restrictions, and HOA fee considerations that buyers must evaluate carefully before purchase.

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Quick answer

  • Entry point: condos offer the most accessible price points in the Key West market with some options below $500,000
  • Financing: many Key West condo projects are non-warrantable meaning conventional financing is not available
  • Rental restrictions: HOA rules vary widely - some projects prohibit short-term rentals entirely
  • HOA fees: can be substantial in Key West condo projects reflecting insurance, maintenance, and amenity costs
  • Investment potential: limited compared to single family homes with short-term rental licenses
  • Best fit: primary residence buyers and those seeking a low-maintenance Key West base without rental income goals

Key West condo financing considerations

  • Many Key West condo projects do not meet Fannie Mae and Freddie Mac warrantability requirements limiting buyers to portfolio or jumbo loan products
  • Non-warrantable designation typically results in higher interest rates and larger down payment requirements
  • Resort-style and hotel-condo projects are particularly likely to face financing restrictions
  • Buyers should confirm financing availability for a specific condo project before going under contract
  • Cash purchases eliminate financing complexity and are common in the Key West condo market

Rental and HOA considerations

  • Short-term rental rules vary significantly by condo project - some allow rentals, many restrict or prohibit them
  • HOA fees in Key West condo projects reflect high insurance costs, saltwater environment maintenance, and amenity upkeep
  • Special assessments for deferred maintenance or capital improvements are a risk in older condo projects
  • Buyers should review HOA financials, reserve fund status, and meeting minutes before closing on any Key West condo
  • Some Key West condo projects have hotel-style management programs that generate rental income but with significant management fees

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