First vacation home- Jupiter/Palm Beach Garden

[Matthew B.]

I’m interested in buying a personal vacation home in the Jupiter or Palm Beach Gardens area. We’ve vacationed in the area for the last several years and would like to buy a condo or townhouse.

Looking for insights from the BP community as well as local help.

- What down payment % is ideal for a vacation home?

- Is it feasible to use current home equity to purchase/renovate? 

- 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.

I know this will vary by community but trying to information gather now to start the process. 

[Landon Smith]

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!