First vacation home- Jupiter/Palm Beach Garden
Member since 2025 · 2 posts · 0 votes
First vacation home- Jupiter/Palm Beach Garden
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Landon SmithBusiness Member
Real Estate Broker · Worldwide · Member since 2023 · 5 posts · 2 votesMatthew,
Great questions. Here’s my 2 cents...
Down payment: If this is your first vacation home, you may qualify for a second home loan with as little as 10% down and a better rate. Also comes with requirements of use per year (IRS rules). If you're buying strictly for investmentl, most lenders will want 20 to 25 percent down.
Using equity: Yes, it's feasible. A HELOC is usually the better option over a home equity loan because it's interest-only and more flexible. Just note that some states like Florida and Texas have homestead laws that affect how HELOCs work. Also, HELOC's are like Ferrari's...amazing and powerful but if you don't know how to drive one it can kill you. It's all about discipline and intention with HELOC's.
Short-term rental rules: You need to look at more than just the HOA. Some properties have CCRs (covenants, conditions, and restrictions) that can block STRs even if there's no HOA. You also need to check city requirements for STR permits, local zoning, and whether any STR caps are in place.
In Jupiter and Palm Beach Gardens, some areas allow STRs with permits, some have 30-day minimums, and others prohibit them altogether. Get this info before you make an offer.
Property management: Yes, you can use a property manager even if you stay there part of the year. Just decide how involved you want to be. Full-service or co-host/self-manage setups are both possible...pros/cons to each.
One last thing: Be clear about your goal. Are you buying this for lifestyle, for income, or for both? I’ve worked with clients who wanted a vacation home in a market they loved but the numbers didn’t work. They ended up buying in a better performing market and used the income to fund trips to their preferred location.
Hope this helps man...and good luck!
9 Replies
- Member since 2020 · 61 posts · 39 votes8mo
Lots of HOAs in that area. Make sure you can rent nightly or weekly. Unless you are east on the water or near the beach I would be skeptical of a strong demand.
- Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes8mo
I personally would never buy a condo unless I owned 75%+ of the units. So as a general rule - no condo investing. Too many uncontrollable variables, generally less appreciation, less value-add you can do etc.
I would suggest getting with "The Short Term Shop". They are the experts in the short term area. AirDNA for estimated daily rates. There's a few good books out there too - Short Term Rental Long Term Wealth.
Sure you could use a HELOC or something to purchase and/or renovate - I personally don't like that type of leverage for a new investment or something you have no experience in. But it is an option. I would use that type of leverage where the loan would be paid off quickly ie: a flip. It's doubtful you will have the cashflow to pay off the loan quickly.
Downpayments vary - I would personally not do less than 20%. You need to ensure you will have positive cashflow even though this may come at the expense of ROE.
Google "materially participating in short term rentals" & "short term rental loophole" - that will give you more tax info regarding vacation/investment homes than I can inaccurately regurgitate here. The short term shop will likely recommend self managing which is not a bad idea IF that's the sort of thing you want to do.
Also make a buy box - size/location/price etc. Then ask yourself "why" 5 times and that should get you pretty close to where you need.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes8mo
Quote from @Jeremy Horton:
I personally would never buy a condo unless I owned 75%+ of the units. So as a general rule - no condo investing. Too many uncontrollable variables, generally less appreciation, less value-add you can do etc.
I would suggest getting with "The Short Term Shop". They are the experts in the short term area. AirDNA for estimated daily rates. There's a few good books out there too - Short Term Rental Long Term Wealth.
Sure you could use a HELOC or something to purchase and/or renovate - I personally don't like that type of leverage for a new investment or something you have no experience in. But it is an option. I would use that type of leverage where the loan would be paid off quickly ie: a flip. It's doubtful you will have the cashflow to pay off the loan quickly.
Downpayments vary - I would personally not do less than 20%. You need to ensure you will have positive cashflow even though this may come at the expense of ROE.
Google "materially participating in short term rentals" & "short term rental loophole" - that will give you more tax info regarding vacation/investment homes than I can inaccurately regurgitate here. The short term shop will likely recommend self managing which is not a bad idea IF that's the sort of thing you want to do.
Also make a buy box - size/location/price etc. Then ask yourself "why" 5 times and that should get you pretty close to where you need.
I don't consider condos for LTR due to fees and supply when trying to sell but feel that in resort areas specifically beaches condos can be an option as affordable STR investments.
- 8moLandon SmithBusiness MemberReal Estate Broker · Worldwide · Member since 2023 · 5 posts · 2 votes
Matthew,
Great questions. Here’s my 2 cents...
Down payment: If this is your first vacation home, you may qualify for a second home loan with as little as 10% down and a better rate. Also comes with requirements of use per year (IRS rules). If you're buying strictly for investmentl, most lenders will want 20 to 25 percent down.
Using equity: Yes, it's feasible. A HELOC is usually the better option over a home equity loan because it's interest-only and more flexible. Just note that some states like Florida and Texas have homestead laws that affect how HELOCs work. Also, HELOC's are like Ferrari's...amazing and powerful but if you don't know how to drive one it can kill you. It's all about discipline and intention with HELOC's.
Short-term rental rules: You need to look at more than just the HOA. Some properties have CCRs (covenants, conditions, and restrictions) that can block STRs even if there's no HOA. You also need to check city requirements for STR permits, local zoning, and whether any STR caps are in place.
In Jupiter and Palm Beach Gardens, some areas allow STRs with permits, some have 30-day minimums, and others prohibit them altogether. Get this info before you make an offer.
Property management: Yes, you can use a property manager even if you stay there part of the year. Just decide how involved you want to be. Full-service or co-host/self-manage setups are both possible...pros/cons to each.
One last thing: Be clear about your goal. Are you buying this for lifestyle, for income, or for both? I’ve worked with clients who wanted a vacation home in a market they loved but the numbers didn’t work. They ended up buying in a better performing market and used the income to fund trips to their preferred location.
Hope this helps man...and good luck! - 8moAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
I am in the Tampa area, so will answer to the best of my ability considering it is a similar market in the same state, but as noted there will be nuances from town to town and I am not super familiar with Palm Beach area:
1. Avoid HOA's and condos if possible. I have found some success for clients in condos with HOA's and they were buying primarily as a second home and wanted what they wanted which was a Gulf front condo. They are doing well, but they could have had a higher cashflow avoiding it. Condo's can change their fees and impose new rules and higher fees at will as well as special assessments. It is not ideal.
2. You sound like a prime candidate for 10% down second home loan. I do have a great FL lender who specializes in that which I am happy to connect you with if you wish. 10% down means less cashflow, higher leverage, and higher risk but you can get a higher cash on cash return this way if done correctly.
3. Using home equity to purchase/renovate/furnish is feasible, again if done right. Now you are basically financing 100% so you must be very careful here to ensure finances are in order or you could end essentially gambling your primary on your secondary. It is risky, but not impossible, though likely not generally recommended.
4. In addition to being a broker for the Tampa Bay area I also manage around 60 units. About half of my units under management are second homes for my clients and they do use it as such and I manage the time they are not occupying. If you hire a PM beware some do have restrictions on amount of personal use/black out dates.
I hope this helps and happy to help further if needed. Good luck and Happy New Year!
Vacation Rentals of Florida53 Reviews - Member since 2025 · 2 posts · 0 votes8mo
Thanks everyone, appreciate the thorough answers and will use this to refine the search.
- Property Manager · West Palm Beach, FL · Member since 2025 · 18 posts · 13 votes8mo
Hi Matthew,
As many have noted, Make sure you are in the know with the different HOA rules when it comes to renting short term, many do not allow the nightly or weekly and only allow monthly, yearly, or a limit on the number of renters in a year. There are many different neighborhoods to look at. If access to the water is the priority, Jupiter/ Juno Beach are a great option! The PBG and Jupiter area are very sought after for people who are both short or long term renters for when you are not using the home.
You will definitely be able to use a property manager- just make sure they are in the know with local and HOA rules with your rental, each town has some of their own guidelines to it.
Tyler Dyson
- Lender · Tampa/Saint Petersburg, FL · Member since 2014 · 356 posts · 148 votes8mo
Hi Matthew,
I’m an investor/lender and specialize in working with investors (both short term & long term).
- That said, if you plan to use this property as a place you vacation and rent out when you’re not there, you could do a 2nd home loan with 10% down. I also have a short ebook that breaks down short term rental financing options with pros & cons if that’s helpful... happy to share so you can decide what makes the most sense for you.– You can definitely use a HELOC to fund the down payment or renovations assuming the numbers work. I'd just be mindful of not over leveraging... everyone's situation and comfort level with leverage is different.
– You should still be able to work with a short-term rental management company even if you’ll be vacationing there part time.
Additional insight from the lending side: condos can be tricky and often require more down payment. I'm also seeing a lot of lenders pull back from condo financing, which is something to keep in mind for future resale. If/when you sell, the buyer pool may be more limited. On top of that, HOA costs are variable and can increase over time, which can impact cash flow.
- 8moRaymond J. RodriguesBusiness MemberLender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
@Matthew B. i'll answer your questions down below.
- What down payment % is ideal for a vacation home? --You can get in with as little as 10% down. I help clients utilize this financing strategy all the time for their vacation homes/short term rentals.
- Is it feasible to use current home equity to purchase/renovate?--Yes, if leveraging equity makes more sense than using your own cash, then why not?
- If I use this as a vacation home for a few weeks out of the year, can I work with a property manager as a short term rental or are there restrictions.--Of course. Conventional guidelines do not state that you cannot have a property management company in place. They just cannot have exclusive control as to when you're able to occupy the property.
Feel free to reach out with any questions. I am local here in South Florida and happy to be your trusted lending source!
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