Thinking About Buying a Florida Vacation Home? You Can Do It - Here’s How.
Are you a retiree or small-time investor looking to the great state of Florida for some real estate investment opportunities? Buying a second home in Florida is a great idea for those who want a place to vacation, a place to make extra income, and a place to stash away as an investment. It can be affordable, too. Here’s what you need to know.
You’ll want to start renting it out ASAP
One way to make your vacation home more affordable is to get it generating income as soon as possible. Any day it sits there, unoccupied (by you or anyone else), is a wasted opportunity to make money. Investors in Florida real estate can expect to recoup enough in rental income to make back their mortgage payment on the home - at a bare minimum. If you’re smart about your purchase and focus on upkeep, it’s probable that you can turn a profit on the home - simply from rentals. Nowadays, Airbnb makes it easy to rent out properties, but there are certainly more traditional options like VRBO.com.
Do note: Even if you own the home outright, it’s possible that a homeowner’s association, neighborhood association, or condo managing property might have restrictions on rentals. Before you buy, it’s vital that you do your research. Also check here and here for info on the tax side of it all.
You might want to buy inland a little bit
“Nothing adds a premium to the price of a house like a beachfront location. Even a house situated merely within walking distance of the beach costs substantially more than a comparable house 10 miles inland,” says Investopedia. If you want to make your vacation home truly affordable at the outset, you may want to consider moving inland and buying a little further away from the beach. You can still enjoy the benefits of being a “beach-adjacent” property if not a “beachfront” property. Being 10 minutes from the beach is nice enough for most.
Don’t count on the rental income when you buy
Sure, you can plan to use the home for rental income but you can’t count on it in order to justify buying outside your means. Here’s are some tough facts about buying a vacation home: it may require a larger down payment; it may require special insurance; wear and tear may need to be addressed more frequently; and the taxes may be different than what you know on your primary residence. That’s why it’s crucial that you buy within your means. Your mortgage payment is far from the only cost. You’ll need to factor in taxes, insurance, repair costs, upkeep, renovations, and more. Think about it this way: have you factored in something like pool maintenance? The cost of pool supplies may not be astronomical, but it adds up over time.
Don’t forget to stay there at least two weeks a year
For retirees looking to live near the beach, this won’t be an issue. But for small-time investors looking buy in Florida, you should make sure that you use the vacation home as your primary residence for at least two weeks out of the year. Why? Well, if you want to utilize the mortgage interest deduction on your second home, you need it to be a home - at least for a couple of weeks that is.
Nothing is certain in life, and that goes double for real estate. But if you’re looking for one of the sounder real estate investments or a second home location that is sure to be fun and likely profitable, you can’t do much better than Florida.