Investing in a vacation home comes with risks and rewards. Even so, without doing any preliminary research, Florida likely came up on the top of your list as a secondary location to drop your hat — and with good reason. But before taking the plunge, take a deeper dive into the Sunshine State and your financial situation before making a final purchase.
Why Florida Is A Good Choice
The reason to choose Florida as a vacation home destination goes beyond the sun, surf, desirable temperatures, and 1,300-plus golf courses. Other benefits include:
No income, inheritance, or estate tax — while this list could stop now, there is also...
Lower cost of living — not including destinations like Miami.
11 key airports accommodating domestic (many direct) and international flights.
Copious healthcare options and reputable hospitals.
Despite recent challenges such as a strong dollar and hurricane damage, Florida remains a top vacation destination. As proof positive, many airlines continue to add non-stop flights there. This is important intel not only if you plan on selling your home in the future, but if you want to rent it to visitors when you’re away.
How To Know If You’re Ready To Buy
The thought of purchasing a vacation home can be an exciting proposition, yet there are some realities to consider before taking the plunge.
It can be difficult to obtain a loan for a second home because lenders are often pickier about the approval process — mainly because this is not a home you’re living in full-time, and it’s also considered an additional financial risk.
Don’t buy based on your current income. Between loss of spouse or other variables that may affect your financial flow, make sure you’re making an attainable investment.
Down payments can be as much as 20 to 30 percent in some cases — are you prepared for that?
Ask yourself if you can realistically budget extraneous costs such as travel to and from your vacation home on a regular basis, home-related expenses such as maintenance and security measures, and potential management fees.
Choosing The Right Home For You
So, you’ve established the fact that you have all your financial ducks in a row and you’re ready to buy. There are a few variables to consider before dropping an anchor at your dream home.
Rent before you buy. This is one of the best ways to assess whether the neighborhood or community you’re considering will make you happy for the long-term.
Alternatively, make sure the home you want to buy is rentable. Many second home owners are able to quickly make a return on investment by renting their home when it’s not in use — but only if it’s well-maintained and in a desirable location.
Don’t buy a home larger than you need. Occasional visitors aside, ask yourself who you’re buying the home for.
Try to maintain your lifestyle by living in an area that offers hobbies you enjoy — or at the very least, a community that helps organize a variety of activities.
Don’t rely on the fact that you’ll always be able to drive. An area that’s accessible to public transportation and/or is within walking distance to conveniences such as a grocery store, or recreational activities such as the golf course, will only benefit you in the long run.
Consider a floor plan that compensates for disabilities. Perhaps you or your spouse will need a walker or wheelchair at some point — whatever the case, carefully consider entryways and the location of common areas such as the bathroom, bedroom, and kitchen before making a purchase that might result in home modifications down the line.
Don’t let precautionary measures take the wind out of your sails. Florida has consistently remained one of the top places to purchase a vacation home for both practical and lifestyle reasons. Do your homework, create an effective plan, and ask yourself a few tough questions and you’ll be on the beach in no time.