What to know before buying a vacation home in Florida

Buying a vacation home in Florida is popular, probably due to its year-round mild weather and its high tourism potential. In 2024 alone, the Sunshine State saw 143 million visitors. The first quarter in 2025 saw 41.2 million visitors. 

Despite the apparent popularity, as an investor, you may face several challenges when entering this real estate market. Some include finding financing, potential increased costs due to hurricane season, and property management costs. It’s important to consider if buying a vacation home in Florida is a good investment based on your needs beforehand.

Key takeaways:

• Florida’s warm weather and amenities make it a popular choice for those wanting a vacation property
• The overall cost of buying and maintaining a property in Florida could be affected by extreme weather and location within the state
• Buyers need to understand any potential restrictions set by homeowners and condo associations beforehand

Why should I buy a vacation home in Florida?

Florida’s warm climate is a major draw to the state, with the average temperature around 73 degrees Fahrenheit and anywhere from 230 to 250 sunny days per year.

Don’t forget that there are plenty of tourist attractions in the state. There are theme parks like Universal Studios, Legoland and Walt Disney World, just to name a few. Other notable attractions are the Key West area and Florida's many natural springs.

Florida also offers some tax advantages for investors. Florida caps annual property tax increases to 10%, which is more manageable for investors compared to other states. And many counties haven’t (or aren’t planning to) increase property tax rates for the next year or so.

Florida is also experiencing significant job growth in certain industries, like health care. There may be a shortage of certain jobs in this industry, which will add to the demand for workers. Other industries that are seeing growth include financial services and technology.

All of these factors combined could be good reasons for purchasing a vacation home.

Statistics about Florida’s real estate market

If you’re seriously considering purchasing a vacation home in Florida, here are some facts you’ll want to know:

• The median home price is around $404,200 as of September 2025, which is still lower compared to the $439,869 national median price.
• While Florida is one of the states that have seen the highest rates of people moving into the state, larger areas like Miami-Dade and Orange County have seen slight decreases in rental prices.

What do these facts mean? For one, knowing what most homes can cost in Florida will help you determine whether you have the financial means to purchase a vacation home.

Aside from the mortgage payments, you’ll need to consider other related expenses like property taxes, homeowners insurance, and maintenance. If you’re not planning on staying in the home for long stretches of time, that can affect ongoing costs as well.

With a large purchase such as a vacation home, it’s crucial you do extensive market research. You may also benefit from working with an experienced real estate agent who specializes in vacation properties.

What to consider before buying a vacation home

Buying a vacation home is different from a primary residence, and there are different considerations. Some factors to think about include how often you intend on staying there, the location, and the types of maintenance the property will need.

How often will you be using the home

Your vacation home can be classified either as your secondary residence or rental property based on how often you plan on staying at the home. According to the IRS, if you stay in the vacation home more than 14 days per calendar year or you rent it for less than 10% to others at a fair market price, the home will be considered your secondary residence.

For example, if you decide to stay at the home with your family and friends for 20 days out of the year, it counts as a second home. But if you decide to rent it out for more than 200 days at a fair market price, it may be considered a rental property.

This distinction could affect your taxes and what expenses you may be able to deduct.

How the seasons will impact the usability of the property

You can use your vacation home whenever you want, but the time of the year can affect your stay. For example, the winter months will see some cool weather, but you won’t face as many storms or extreme weather.

Hurricane season is from the beginning of June until the end of November. During this time, if you experience severe rainstorms, winds, and other related challenges from hurricanes, your property could face issues. It could be even more extreme at the height of hurricane season from August to October.

How much maintenance the home will need

Homes in Florida can vary in age and quality, so it’s worth it to take the time to determine what expenses you may need to budget for when maintaining your home.

Different areas in the state may have different costs, such as materials and hiring professionals. If your home is located near water like the coast or within a flood zone, you may need to pay more to ensure your home is free of mold or other types of damage.

Costs of buying a vacation home in Florida

Since Florida is such a large state, there are different factors that will influence how much you’ll pay for a home.

The sales price will vary by region

The location will significantly affect how much housing costs in Florida.

In Panama City, for example, the average home sold for $266,000, but homes have been sitting on the market for longer. While Panama City has seen slight increases in home values, Cape Coral has not. As of July 2025, housing prices have gone down 7.9% compared to the previous year.

When it comes to the future, Panama City has been issuing more single family housing permits, which could mean homes appreciate more until the new homes are built. Cape Coral, on the other hand, could see a decrease in home values because of factors like price cuts and underwater mortgages.

Aside from location, the type of home could affect your budget, as will fluctuating mortgage rates. A condo could be more cost effective compared to a single-family home. However, there may be ongoing costs like association fees.

Property taxes will vary

Where you live will affect how much you pay in property taxes. Even if you’re a legal resident of Florida, your home won’t qualify for the homestead exemption which reduces property taxes. That’s because one of the qualifying criteria is that the home needs to be your permanent residence, and a vacation home or second home won’t count as that.

Some communities have fees and restrictions

Homes in Florida may be part of homeowners association or condo association, so you may have to pay fees or follow any rules stated in the covenants. Depending on your association, you may not be able to rent out your home, even if it’s your secondary residence.

Flood insurance and hurricane preparation

Florida is a prime area for hurricanes, and its hot and humid climate could mean increased risks to your home. For one, you may be required to purchase flood insurance if you live in a flood-prone area.

Tips for choosing the right location for your vacation home

Your preferences for a vacation home are unique to you. Here are some best practices on how to choose the right fit:

• Proximity to desired locations: Decide beforehand where you plan on spending your time, whether it’s the beach or the many amusement parks in the state. 
• Look at flood zones: Check to see if the area you want has been prone to floods or historically has seen a lot of damage from prior hurricanes. 
• Consider its resale potential: Do some research in the neighborhood to see appreciation of the homes where you want to buy. You may not want to sell the home for a while, but knowing that home values generally go up is helpful.

What to expect when financing a vacation home

Taking out a home loan for a vacation home may be slightly different from buying your primary home, especially when it comes to financing one.

Tighter requirements for financing a second home

Buying a home may come with stricter requirements, including:

• Higher down payment amounts
• Increased minimum score criteria
• Lower debt-to-income ratio (DTI)
• More cash reserves on hand

You’ll have to compare interest rates

Interest rates may be higher compared to mortgages for a primary residence. Lenders see buying a second home as a higher risk, so the interest rate would reflect this.

Lenders will want larger down payments and higher credit scores

Many lenders may ask for a 720 minimum credit score to help lower their risk with lending you money. That’s the same reason why lenders may require larger down payments, so you have a larger stake in the home.

Should I rent out my vacation home?

To help offset some of the costs of a vacation home, you could rent it out when you’re not there. As with all decisions, it comes with its own set of pros and cons.

Pros

• Offset costs: By earning some rental income, you can use the funds to pay for costs like property taxes, insurance or home maintenance.
• Tax advantages: If you rent your home for more than 15 days per year, you may be able to deduct qualifying expenses.
• Still be able to enjoy property: You can still spend time in the home whenever you choose, giving you the flexibility to rent it out as desired.

Cons

• Potential restrictions: Some HOAs or condo associations may restrict homeowners from short-term or mid-term rentals, even for vacation properties.
• Higher maintenance costs: You may need to hire a property manager or someone to clean the property when guests come and go.
• Seasonal risks: Your home may sit vacant at certain times of the year, or guests may only want to rent out your home during the times you want to be there as well.

FAQ about Florida vacation homes

To learn more about buying a vacation home in Florida, explore these frequently asked questions.

Is it financially smart to buy a vacation home?

Buying a vacation home could be a smart move if you can afford the mortgage payments and upkeep. It could also work if you’re able to earn money from renting out the property.

Is it harder to get a mortgage for a vacation home?

Qualifying for financing on a second home could be more strict, such as meeting a higher minimum credit score requirement and making a larger down payment.

What is the rule of thumb for buying a vacation home?

There really isn’t an absolute rule of thumb for purchasing a vacation home, but it’s important to consider whether you can truly afford to buy one.

Do I need hurricane insurance?

There isn’t a definitive hurricane insurance policy you can buy. You can purchase standard homeowners insurance and pay for extra protection such as flood insurance and adding windstorm protection.

Can I write off expenses on a vacation home?

You may be able to deduct certain expenses if you receive rental income. Check with a reputable tax professional to see what you can deduct.

The bottom line: A vacation home in Florida can be a ray of sunshine

If you have the financial means and desire to do so, buying a vacation home in Florida can greatly enhance your life. Your dream about staying near the beach for weeks at a time may finally come true.

The reality is that there are real costs and upkeep in order to own a vacation home. Take the time to calculate how much it could cost you in time and money to be sure you’re willing to commit.

And if you are, consider financing options like a cash-in refinance to help you buy your dream vacation home.

Rocket Mortgage, LLC, Rocket Homes Real Estate LLC, RockLoans Marketplace LLC (doing business as Rocket Loans), and Rocket Money, Inc., are separate operating subsidiaries of Rocket Limited Partnership. Redfin Corporation is an affiliated business of Rocket Limited Partnership. Each company is a separate legal entity operated and managed through its own management and governance structure. Rocket Limited Partnership is an indirect, wholly owned subsidiary of Rocket Companies, Inc. (NYSE: RKT).