Coral Lagoon Vs. Indigo Reef: Best For Rental ROI?

Trying to decide whether Coral Lagoon or Indigo Reef will deliver the stronger rental ROI? In the Middle Keys, a beautiful marina view is not the same as a profitable investment. You want a getaway that pays its way, but seasonal demand, local rules, and insurance can make the numbers tricky. This guide shows you how to compare both resorts like an investor so you can model returns with confidence and avoid surprises. Let’s dive in.

Keys STR ROI basics

Rental demand in Monroe County is seasonal. Peak travel typically runs from late fall through spring, while late spring and summer can see lower occupancy. That swing affects your average daily rate, occupancy, and annual revenue.

Supply is naturally tight across the Florida Keys. Limited land and island geography restrict new development, which can support higher rates when demand is steady. Your exact unit type and amenities will still determine how much you can charge.

Hurricane season runs June through November. Storm risk can disrupt occupancy and add repair and operating costs. Many properties sit in coastal flood zones, so factor flood exposure and mitigation into your plan.

Regulations that shape returns

• Short-term rental rules vary by municipality within Monroe County. Confirm the specific city requirements for permits, inspections, and minimum stays before you underwrite returns.
• Expect to collect and remit state sales tax and local tourist development tax on nightly rents. Build tax remittance into your operating plan.
• HOA or condo documents may allow, restrict, or prohibit short-term rentals. Rules like minimum rental length or caps on the number of rentals can change your revenue potential.
• Some areas require proof of insurance and a local contact for guest issues. Fines for noncompliance can be steep, so verify permits and compliance in writing.

The numbers that matter

Use a small set of clear metrics so you can compare Coral Lagoon and Indigo Reef on equal footing:

• Gross rental income: ADR × occupancy rate × rentable days. Use a seasonal calendar, not a flat average.
• Net operating income (NOI): Gross income minus operating expenses. Include management, HOA, utilities, insurance, cleaning, repairs, marketing, taxes, and reserves.
• Cap rate: NOI divided by purchase price. This is an apples-to-apples, unlevered comparison.
• Cash-on-cash return: Annual pre-tax cash flow divided by total cash invested. This shows your investor-level return with financing.
• Gross rental yield: Gross income divided by purchase price. Helpful for a quick scan, but it ignores expenses.
• Break-even occupancy: The minimum occupancy needed to cover fixed costs and debt service. This shows risk if demand softens.

Coral Lagoon vs Indigo Reef: What to verify

You will only get a fair answer when you compare the same categories for each property or unit. Start here:

Unit and resort attributes

• Unit type and size: condo or single-family, bedrooms and baths, square footage, maximum occupancy.
• Furnishing and finish quality: turnkey condition or additional setup costs to meet STR standards.
• Amenities that drive rates: pool, water access, marina slips, views, parking, security, on-site management, and guest services.
• Differentiators: direct frontage, included boat slip, or proximity to fishing charters and attractions.

Ownership and legal constraints

• Ownership structure: fee simple vs condo with HOA governance.
• HOA rules: written policy on short-term rentals, minimum stay, registration, occupancy caps, and any special assessments or reserve study notes.
• Rental program: on-site program vs open market management, commission rate, contract term, and owner-use restrictions.

Historical performance and booking data

• Request 12 to 36 months of rental statements: ADR, nights booked by month, refunds, management fees, cleaning, repairs, and taxes paid.
• If history is not available, pull comps for similar bedroom counts within the same resort or immediate area.

Location and access factors

• Island and neighborhood context: ease of access, distance to airports, boat ramps, or major attractions.
• Externalities: noise, nearby construction, or commercial activity that could affect guest experience.

Physical condition and flood exposure

• Building age and major systems: roof, HVAC, plumbing, electrical, and corrosion-resistant materials.
• Elevation and flood mitigation: impact windows, shutters, raised utilities, and elevation certificates.
• Claims history: prior hurricane damage or moisture issues.

Operating logistics

• Management options and cost: on-site vs third-party. Keys STR management often ranges about 20 to 35 percent depending on services.
• Turnover details: cleaning pricing, laundry, keyless entry, guest support hours, and after-hours response.

Build a Keys-specific 12-month P&L

A monthly model captures seasonality and yields a more accurate ROI.

1. Forecast revenue by month using realistic ADR and occupancy for your exact bedroom count. Separate high season from shoulder and off season.
2. List variable costs by month: cleaning, supplies, utilities if you pay them, and platform fees.
3. Add fixed costs: HOA dues, insurance, property taxes, marketing, and management fees. Include a reserve for replacements and storm-related work.
4. Subtract owner-use days from rentable nights. Adjust revenue, cleaning, and utilities to match.
5. Produce monthly and annual totals for gross income, expenses, and NOI.

Run three scenarios and compare

Build conservative, baseline, and upside cases for each resort:

• Conservative: Slightly lower ADR and occupancy, higher insurance and repairs.
• Baseline: Market-average ADR and occupancy with current operating quotes.
• Upside: Better marketing or amenity premium, plus a few more booked weeks in peak season.

Calculate cap rate, cash-on-cash return, and break-even occupancy for each case. Then run a quick sensitivity check to see how a 5 percent change in ADR or occupancy, or a jump in insurance premiums, affects cash flow.

Create a simple scorecard

Use a side-by-side checklist to keep the decision objective:

• Revenue strength: verified ADR and occupancy fit the unit type and seasonality.
• Cost clarity: HOA scope, insurance quotes, and management contracts in hand.
• Regulatory fit: permits confirmed, STR rules aligned with your strategy.
• Physical risk: elevation, mitigation upgrades, and building condition documented.
• Operational ease: on-site support, turnover workflow, guest access, and response time.
• Upside levers: unique amenities, direct-booking potential, or bundled boat slip.

Assign each category a rating and note any deal-breakers. The winner is the property that delivers higher NOI and acceptable risk under your conservative case.

Risk and upside factors to watch

• Insurance and storms: Wind and flood insurance costs have been volatile in coastal Florida. Quotes can materially change cash flow, so price them early and set a repair reserve.
• HOA dynamics: Dues, special assessments, and master insurance coverage can shift over time. Confirm what the master policy covers vs what you must insure.
• Rental restrictions: Minimum stays or permit caps can reduce available nights and push up your break-even occupancy.
• Operations: Management fees, cleaning logistics, and guest services influence reviews and repeat bookings, which shape occupancy and ADR over time.

Which is best for rental ROI?

There is no universal winner without verified numbers. The best choice is the one that, after confirming permits, HOA rules, ADR and occupancy comps, and insurance quotes, produces stronger NOI and a comfortable break-even occupancy in your conservative case. If two options look close, favor the property with clearer regulatory status, better flood mitigation, and more predictable operating costs.

Ready for a local, hands-on comparison? I can help you source documents, validate rental assumptions with local managers, and build scenario models before you write an offer.

If you want a trusted Middle Keys advisor to guide this process end to end, reach out to Tracy Chacksfield. We will keep the analysis grounded and the experience concierge-level from first tour to closing.

FAQs

What is the best metric to compare Coral Lagoon and Indigo Reef?

• Use multiple metrics: cap rate for unlevered comparison, cash-on-cash for your financed return, plus break-even occupancy to gauge risk.

How do Monroe County rental rules affect ROI in the Keys?

• Rules on permits, inspections, and minimum stays can limit rentable nights and add costs, so verify local ordinances and HOA policies before underwriting.

How should I budget for hurricane season and insurance in the Keys?

• Get current wind and flood quotes and set a repair reserve; plan for seasonal downtime and potential deductibles that can impact annual cash flow.

How much do HOA dues matter for STR returns in marina-style resorts?

• They matter a lot: dues, master insurance scope, and special assessments can shift NOI, so confirm coverage and fees in writing.

What data do I need to model ADR and occupancy for these resorts?

• Ask for 12 to 36 months of rental statements for comparable units, then validate with local managers and seasonal booking patterns for your bedroom count.