1. Long-Term Profits
While all assets fluctuate in value in the short term, Central Florida vacation properties are more likely to retain their value and appreciate simply because they are located in one of the most popular areas with a geographically limited supply. There are limits to central florida homes on the beach and inland near the Orlando area, increasing the probability that the value of a Florida investment will increase.
2. Tax Deductions
Many people who own second homes prefer to keep them unoccupied when not being used for personal enjoyment. If you allow and charge rent for occupancy for no more than two weeks per year, the interest on the mortgage and the property taxes are fully deductible from your gross income. In other words, for tax purposes, you can treat this mortgage the same way you would the mortgage on your primary residence.
3. Rental Income
If you decide to rent your home, but personally use the property as well, you’ll need to determine whether you’re eligible to deduct operating expenses. To determine this, add up the days you rented the property. If you occupied the property fewer than 10% of the days you rented it or for less than two weeks – whichever is greater – you can deduct all of the operating expenses of the home including interest, utilities, cleaning fees, lawn maintenance, and management fees. If you need help determining what you’re eligible to deduct, contact a tax professional or review IRS Publication 527 on vacation rentals.
Rental fees vary according to seasons and the popularity of the greater orlando resort location. For most resorts, peak season weekly rental fees are usually equal to or greater than the property’s monthly mortgage payment, allowing you to break even with an annual occupancy around 30% from a cash flow viewpoint.
Returning to the same place time and after time can be comforting as you become familiar and comfortable with the location. It allows you the freedom to be yourself and the opportunity to expand long-term friendships with residents – you can become part of the social fabric in this “second” community.
5. Retirement Head Start
Though we may love the places where we work and live, every place has its drawbacks. If you live in Texas, for example, the summers of 100-plus-degree temperatures are brutal. People in Chicago, Philadelphia, and other northern cities often hate the annual struggle with snow.
A common goal of retirement is to have a place of retreat for the times of the year we dislike the most at our main residence. Locating and buying a second home prior to retirement enables you to experience the benefits of a refuge before actual retirement, a time to correct and amend your plans if the reality is different than the dream. The Greater Orlando area is one of the most sought after locations to purchase a home in the world, and often thought of as the perfect place to retire. Get a head start with David Dorman assisting you as your realtor.