Thinking of purchasing a Rental Property? Here are the 5 things you need to know
What You Need to Know About Buying a Vacation Home in Florida
With its lush climate and a booming economy larger than that of many whole countries
according to the Florida Chamber of Commerce, Florida is a favorite destination for tourists –
and it might just be the best place for you to buy your new vacation home. If you’re thinking
about buying a vacation home in Nassau County, FL, here are some things you need to know,
courtesy of Nassau County Living.
A Vacation Home is a Fantastic Way to Generate Bonus Income
Owning a second home is an excellent way to produce an income, especially in tourist-heavy
areas. Often, it’s enough to cover your second mortgage, upkeep, taxes and expenses
associated with advertising, cleaning, and property management – the “free” vacations are a
bonus. Similar to becoming a landlord, owning a single vacation property won’t make you rich
but, with the right property, it won’t put a dent in your monthly budget.
Prep for Florida’s Weather
Many people are drawn to Florida’s subtropical climate, which consists of mild winters but hot,
humid summers. Heating bills in the winter won’t be much of a burden but come summer, you’ll
definitely need to make sure you have a working HVAC system. You can help keep cool – and
costs down – by using ceiling fans as well.
You’ll have Expenses like Insurance and Amenities
Purchasing a second home is similar to the process of buying a primary residence.
Mortgageloan explains the main difference in financing is that you will be required to put down a
much larger amount, often 25% or more. Be selective when choosing a property, try to stay
under your budget so that paying for your vacation property does not become a source of
With any home, most lenders will require you to take out a homeowners policy when you
purchase a home. It’s important to understand what to expect looking at insurance options in
Florida. For instance, the average cost to homeowners is higher than the national average.
Prices will vary based on square footage, location, and similar factors. Shop around and get
quotes so you can make sure you make the most of your money.
If you want to make your home as appealing as possible to renters, you may have to add some
amenities, which can bring the price up. A hot tub, outdoor patio, and modern kitchen are
upgrades to consider. Looking to attract senior vacationers? Checkfront notes that’s a smart
choice, given the fact that they potentially drive over half of travel spend. Make sure your home
is free of tripping hazards, has plenty of lighting, and that any stairs have handrails on both
You will Save Money on Vacations if You like the Property
Florida’s eclectic topography includes beaches (obviously), wetlands, and forests, so your
vacation property should put you in proximity to the features you love the most. If your interests
lie in the surf and sand, stick within a mile of the beach. Tap into the local expertise of seasoned
pros like Carrie Ann Kilpatrick, Realtor and owner of Nassau County Living to help you find the location
right for you. Cities like Tampa and Miami are iconic and vibrant, but more expensive than similar-sized
locales. Orlando and other cities near major theme parks are options if mouse ears and wizard
wands are at the top of your priorities list. Rent comparable homes – at least once each season
– in the area before you make your decision. Remember, if the home isn’t convenient for you,
you will likely wind up spending money to vacation elsewhere.
There are Tax Benefits
There are numerous expenses that go along with owning a second home, especially if you plan
to use it as a rental vacation property. But on the flip side of the overhead are the tax breaks
you’ll enjoy. Calculating these tax deductions is complicated and is based on the amount of time
you occupy the property for personal use versus the percentage of the year it’s used to
generate an income. You may be able to claim depreciation and deduct mortgage interest,
management expenses and other costs. It’s best to partner with an accounting professional to
ensure that you are reaping the most financial benefits from your investment.
Remember, if you are looking to invest because you need additional funds each month, a
second home probably isn’t for you at this time. However, if you can make the payments without
affecting your quality of life and don’t mind being flexible with your own vacation plans, a Florida
vacation home may be just what you need to secure your retirement and have the extra money
to actually enjoy it.
copy provided by Joyce Wilson