Florida draws foreign investors who want a rental that earns from visitors. A short-term rental can be financed like any other investment property, through a US LLC, with no US credit history and on the same terms as a US investor. Two things are different from a long-term rental: the state treats it as a lodging business, and the income is harder for a lender to rely on.
The line between a rental and a second home
A business-purpose loan finances a non-owner-occupied investment property. If you or your family will use the property for holidays, even a few weeks a year, it is a second home, and a business-purpose loan is the wrong product. Passy Capital finances short-term rentals that are operated as a business, not properties that are partly rented and partly lived in.
What Florida law requires of a vacation rental
Cities and counties can add their own registration, inspection, parking and occupancy rules, and many condominium and homeowners' associations restrict or prohibit short stays. Check the association documents before you sign: a building that bans short-term rentals turns your plan into a long-term rental overnight.
| Requirement | What it says | Source |
|---|---|---|
| When a unit is a lodging establishment | Rented to guests more than three times in a calendar year for periods of less than 30 consecutive days, or advertised as regularly rented for such periods | s. 509.013, F.S. |
| Vacation rental category | A condominium or cooperative unit, or a 1 to 4 family house, that is a transient public lodging establishment and not a timeshare | s. 509.242, F.S. |
| State license | Each public lodging establishment must obtain a license from the Division of Hotels and Restaurants | s. 509.241, F.S. |
| State sales tax | 6% of the rent on stays of six months or less | s. 212.03, F.S. |
| County tax | Counties may levy a tourist development tax on stays of six months or less | s. 125.0104, F.S. |
How a lender sizes the loan
Short-term income moves with seasons, platforms and reviews, and a property you are buying usually has no operating history in your hands. When the short-term income is not documented, lenders commonly size a rental loan on the property's long-term market rent, which an appraiser can support, and treat the short-term upside as yours. Where the property has a track record of bookings and the program allows it, that history may be considered. Either way, assume the loan has to work on long-term rent.
Leverage is the same as for any rental: a DSCR loan up to 80% LTV on a purchase, from $1M to $5M. For a property that needs work before it can be let, a bridge or renovation loan comes first and the DSCR loan refinances it.
Florida costs to budget
The Florida fix and flip entry covers the state's transfer taxes and flood rules in more detail, and the Florida page covers the markets.
- Documentary stamp tax on the deed and the note, plus intangible tax on the recorded loan
- Windstorm and flood insurance, which a lender will require where the property is exposed
- Furnishing, management and cleaning, which a long-term rental does not need
- Sales and tourist development tax collected from guests and remitted, whether by you, your manager or the platform