Thinking about selling your Marathon vacation rental or keeping it for income? It is a big decision, and the right move depends on clear numbers, local permits, taxes, and risk. If you want less guesswork and more confidence, you are in the right place. In this guide, you will weigh current market signals, run a simple hold-versus-sell model, and see exactly what to gather before you choose. Let’s dive in.

Snapshot: sales and rental performance

Marathon sits at a higher price point than many coastal markets. Recent sources show different snapshots depending on method and date. For example, one source reported a median list price near $1,187,499 in December 2025, while other platforms showed median sale prices around $800,000 in early 2026. These gaps are common because each site uses different time frames and data. The takeaway is simple: use recent, address-level comps that match your home’s location, water access, and legal rental status.

On the rental side, market averages vary by provider too. The AirDNA Marathon overview shows average annual revenue around $51,100, occupancy near 55 percent, and an ADR around $549. A competing provider, Airbtics, reports a median annual revenue closer to $85,000, occupancy near 68 percent, and an ADR near $357. That spread highlights why your decision should rely on your property’s last 12 months of actual bookings and expenses.

Marathon and the Middle Keys are highly seasonal. Peak months tend to run December through April, with softer shoulder seasons and lower demand during hurricane season. When you model cash flow, include a conservative scenario that lowers occupancy and ADR during summer and fall.

What permits mean for value

If you plan to sell an active short-term rental, permits and transfer rules can affect buyer demand and price. The City of Marathon requires an annual vacation rental license, a registered local agent with city training, and a safety inspection process as part of licensing. You can review the city’s requirements on the Vacation Rentals portal.

Monroe County’s Land Development Code adds another layer. Many properties require a special vacation rental permit, and in many cases that permit is nontransferable. A new owner would need to apply again. That detail can shrink the immediate STR buyer pool and change the way you market the property. Read the county rules in §134 here: Monroe County LDC Vacation Rental Uses.

If your property is in a condo or HOA, confirm rental restrictions such as minimum stays or caps. Also gather your most recent inspection results and any code compliance records. A clean, current file removes obstacles and builds buyer confidence.

The taxes that shape your net

Short-term rentals in Florida are subject to state and local taxes. Florida’s statewide sales tax is 6 percent. Monroe County also imposes a Tourist Development Tax, which is collected in addition to state sales tax. Learn about the state framework from the Florida Department of Revenue, and check local filing details with the Monroe County Tax Collector.

Some platforms collect certain taxes in specific jurisdictions, but collection rules vary by listing site and can change. You are ultimately responsible for correct registration and remittance. These taxes directly affect pricing and net revenue, so include them in your monthly and annual P&L.

Run two scenarios: sell versus hold

To compare options, build a side-by-side view: your net sale proceeds after tax versus your projected cash flow if you keep the property.

Key terms you will use:

• Net Operating Income (NOI): gross rental income minus operating expenses, before mortgage payments.
• Cap rate: NOI divided by property value.
• Gross Rent Multiplier (GRM): sale price divided by gross annual rent.

Start with your last 12 months of actuals. Pull platform payouts and your expense ledger to fill these lines:

• Gross rental income by month
• Management fees and booking platform fees
• Cleaning and restocking
• Utilities and services you cover
• Insurance and property taxes
• HOA or condo fees
• Routine maintenance and a reserve for capital items
• State sales tax and county tourist development tax

Then create three scenarios for the next year: optimistic, base, and conservative. In the conservative case, lower occupancy and ADR during hurricane season and increase insurance and maintenance by a few percent.

Here is a simple illustration using market-level data from AirDNA for Marathon to show how expenses stack up. Replace these with your real numbers:

• Gross revenue: $51,100
• Management at 25 percent: −$12,775
• Cleaning and supplies at 10 percent: −$5,110
• State and local rental taxes at 12.5 percent: −$6,388
• Utilities, insurance, maintenance, reserves at 10 percent: −$5,110

Approximate NOI before mortgage and owner-level taxes: about $21,700.

This back-of-the-napkin P&L helps you see whether holding makes sense at today’s costs and pricing. If your actual revenue is closer to the higher medians reported by other data sources, re-run the math. The structure stays the same, the inputs change.

If you sell: proceeds and taxes

Selling an investment property can trigger two types of federal taxes.

• Capital gains: You pay tax on the difference between your adjusted basis and the sale price, using federal long-term capital gains brackets. Florida does not levy a state income tax on individuals. See guidance in IRS Publication 544 and talk with your CPA about your bracket.
• Depreciation recapture: Depreciation you have taken, or could have taken, is taxed up to 25 percent on sale under unrecaptured Section 1250 rules. See IRS Publication 527 for details.

If you want to defer federal tax, a Section 1031 exchange may be an option for property held for investment. It has strict timelines and requires a Qualified Intermediary. Start planning before you list. Review the rules in the IRS Instructions for Form 8824 and confirm feasibility with your CPA.

In your sell scenario, net out broker commissions, typical closing costs, and your estimated tax bill. If you will reinvest via a 1031 exchange, note the identification and closing deadlines and discuss realistic replacement options early.

Operational and climate risks to price in

In the Keys, insurance availability and pricing can change year to year. Get renewal quotes for homeowners, wind, and flood coverage before you choose a path. Your decision should reflect what you can realistically insure and at what cost.

Marathon is low-lying and exposed to storm surge and sea-level rise. Use NOAA’s Sea Level Rise Viewer to understand potential future flooding and plan for mitigation. Rising water and more frequent high-tide flooding can influence maintenance budgets, dock access, and long-term value.

Compliance and enforcement also matter. Marathon and Monroe County actively inspect and enforce STR rules. Repeated violations can lead to fines or suspension, which can hurt income and resale appeal. Confirm your license status and recent inspection history.

What to gather before you decide

Collect these items so you or your agent can build a clean analysis:

• Last 24 months of rental payouts and booking calendars, by month
• Full operating expenses: management, cleaning, utilities, insurance, property taxes, HOA, platform fees, maintenance, and a capital reserve
• Occupancy and ADR by month to model seasonality and hurricane season risk
• City of Marathon vacation rental license, Monroe County permit, manager registration, inspection reports, and any code notices
• Insurance declarations and current renewal quotes for homeowners, wind, and flood, including deductibles
• Cost basis and tax records: purchase price, capital improvements, and depreciation schedules for capital gains and recapture estimates

With this packet, your agent can prepare comps for similar STR-permitted homes and non-STR waterfront homes, then build a 3 to 5 year hold projection and a net sale proceeds estimate.

When selling or holding makes sense

You might choose to sell if:

• You need liquidity and comps show a strong buyer pool for your property type.
• Insurance or operating costs make holding uneconomic even under conservative rental assumptions.
• You can trade into a better-performing or lower-risk property using a 1031 exchange.

You might choose to hold if:

• Your net cash flow after realistic expenses meets your goals, even with conservative seasonality.
• Your property has unique features, like sought-after dockage, that you expect to appreciate.
• Selling would trigger a large tax bill that you cannot defer or that outweighs near-term benefits.

Your next step

A clear, side-by-side report removes the guesswork. Ask for a concise package that includes 3 to 5 recent comps, a detailed sell scenario with estimated taxes, and a hold projection with three rent scenarios and updated insurance quotes. If you decide to keep the property, tune pricing, marketing, and guest operations to lift NOI. If you decide to sell, lead with verified permits, clean financials, and the lifestyle features that command a premium in the Middle Keys.

If you want a local partner who manages both rentals and sales under one roof, reach out to Jessica Borraccino. You will get practical numbers, compliance guidance, and a plan to maximize value in Marathon and Key Colony Beach.

FAQs

How are Marathon vacation rental permits handled when a property sells?

• Many Monroe County special vacation rental permits are nontransferable, so a new owner may need to apply anew; confirm city licensing and county permit status early to set buyer expectations.

What taxes apply to short-term rentals in Monroe County, Florida?

• Short stays typically incur Florida’s 6 percent state sales tax plus Monroe County’s Tourist Development Tax; see the Florida Department of Revenue and Monroe County Tax Collector for details.

How should I estimate NOI for my Marathon rental?

• Start with your last 12 months of payouts, subtract operating costs like management, cleaning, utilities, insurance, property taxes, HOA, and rental taxes; exclude mortgage payments to get NOI and run conservative scenarios for hurricane season.

What is depreciation recapture when I sell a rental property?

• Depreciation you claimed, or could have claimed, is taxed up to 25 percent when you sell; review IRS Publication 527 and get a CPA estimate before you list.

Can I use a 1031 exchange to defer taxes on a Marathon vacation rental?

• If the property is held for investment and you follow strict timelines and rules, a 1031 exchange may defer federal tax; see the IRS Instructions for Form 8824 and consult your CPA early.