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Doing the Math on Buying a Beach Home in Florida

A home on the beach in Florida sounds like a dream. Who wouldn’t want to wake up and look out the window to see the ocean, or walk a short distance from the front door and onto sandy shores? If you’re considering buying a beach home, the first thing you need to do is to see if it’s within your budget.

Here are the financial considerations to look into:

The price of the property

Homes on the beach in Florida are going to cost more than homes further inland. Depending on the area, many properties can go well into the millions of dollars, especially if you’re looking to buy an expansive single-family property. Condos offer relatively more affordable options. Either way, you’ll find excellent options in Miami or the Fort Lauderdale-Broward area.

If the beach home is to be your secondary or investment property, you have to be prepared to pay a higher interest rate on your mortgage, as well. You also need to make sure you have a good credit score and debt-to-income ratio.

Utilities and maintenance

As with any other property type, be prepared to spend on your utilities, including power, cable, water, and the internet. If you’re buying a second home, this means you’ll be paying two sets of utility bills.

Your annual property taxes are another thing to consider. Beach homes typically come with a much higher tax obligation because they’re worth more than homes farther from the shore.

Maintenance costs should also be factored into your regular expenses. These can be especially higher for beachfront homes as they are more exposed to the destructive effects of saltwater and strong winds. You will need to regularly inspect for corrosion, water damage, wind damage, mold, and others. These are in addition to regular household maintenance needs, such as HVAC repairs, cleaning, and pest control.

If you’re renting out the property, you will have to spend on marketing and managing it, as well. As the landlord, most of the maintenance and repair costs will likely fall on you. If you’re hiring a professional property manager, you also have to spend on their fees but it could be well worth the cost if you don’t have the time or interest in running the property yourself.

Insurance for beach homes

Beach homes in Florida are at a higher risk of flooding in the event of a major storm. While not mandated by the state of Florida, your mortgage lender will most likely require that you get flood coverage on top of your regular homeowner’s insurance. The coverage will also help protect you from the costs of damage in case of a flood.

Benefits of renting out the property

Many beach home owners choose to rent their property out during the winter months. Florida’s year-round sunny weather makes it highly attractive to vacationers looking to escape the cold and snow in other parts of the country, resulting in a high demand for vacation rentals. This is an option to consider as it provides you with the funds to pay the mortgage and other expenses. Anything left over after these costs is income you can enjoy. Investors who do this are able to earn enough money to cover their costs for the entire year, and enjoy living in the house during the off-season.

If you’re looking for a beach home in Florida, we at The Connie Cabral Group can help you figure out your options and find the right property for you. Call us today at 305.776.0899 or email us at connie(at)conniecabral(dotted)com.