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To be a snowbird or not to be a snowbird?

Top Tips for Buying a Second Home in Florida

By Thomas Melega

It’s that time of year again. The days are getting shorter, and the nights are getting colder. You’re not alone if you’ve dreamed of fleeing to the warmth and avoiding the harsh New England weather. A second home in Florida can be a wonderful reprieve from the winter and a great investment opportunity if it’s within your budget.

What are the benefits of buying a second home in Florida?

Aside from the welcome benefits of endless sunshine, year-round outdoor activities, and a winter escape, buying a second home in Florida can have both personal and financial benefits. If your budget allows, owning a second home in Florida can bolster your personal portfolio and expand your lifestyle options. While many people typically associate Florida with retirees, the population has seen an increase in younger demographics. A 2023 study conducted by SmartAsset revealed Florida was the number one relocation destination for high-earning professionals between ages 26 and 35. Clearly, more individuals and families are exploring home ownership in Florida for the lifestyle perks, tax breaks, and investment opportunity.

Lifestyle: A second home in Florida can be used as a vacation home, secondary residence, or investment property. It’s important to evaluate your desired lifestyle and prioritize your needs and goals. If you’re hoping to eventually retire at this home, make sure that the property is accessible and in an area with adequate access to your health service needs.

Tax Breaks: New England residents often consider buying a second home in Florida because of the tax breaks. Unlike Massachusetts, Florida has no state income tax, and property taxes are collected by county governments, not the state. Property taxes vary county to county, but this difference may be a net-positive for the buyer.

Investment: Florida homeownership can offer both short-term and long-term investment opportunities, depending on your goals. Are you looking to flip the home? Do you want it to be a rental property? Or maybe you plan to vacation there for the next decade, but eventually, you will want to sell the property and use the equity in retirement? These are all viable options and the flexibility of how you use a second home is a nice plus.

Is a Florida home in my budget?

Before making the jump to the Sunshine State, you must determine whether buying a second home in Florida is in your budget. The first step is to assess your finances and get pre-approved for a mortgage, which determines how much money you can borrow to buy a second home. It is important to note that interest rates for second mortgages are typically higher than for first mortgages, and lenders will also look for a higher credit score. A second mortgage will require a down payment of anywhere between 10% to 25% (depending on the type of property), which is a significant expense to factor into your budgeting process.

Once you are pre-approved for a mortgage, you need to be sure that the initial down payment and long-term mortgage payments are financially doable. You should also consider ongoing maintenance costs, including general upkeep, landscaping, repairs and home improvements. These costs can add up quickly and cause financial hardship without sufficient planning. Be prepared, and make sure you have enough financial cushion to handle any unexpected costs before soaring south.

If you don’t plan to retire at your second home, consider ways that the property can still be a part of your financial retirement strategy. Real estate is a strong long-term investment and we recommend approaching this investment strategically in a way that makes the most sense for you and your future. Can you make improvements to the property that will increase the resale value? Can you rent it out for part of the year to have extra income? Regardless of your long-term goals and needs for the property, it is critical that you research the different counties and neighborhoods where you are looking to buy.

Where should I buy a home?

Determining where you should buy a second home in Florida is largely a personal exploration, but we suggest considering a few key questions.

  • What factors are most important to you in buying a second home in Florida? Location? Amenities? The quality of the property itself? These questions will guide your search.
  • Are local property taxes an important factor for your budget? If so, consider researching counties with lower property taxes.
  • Is it important that you are on the coast or are you happy to live more inland?
  • Do you want a beachfront or waterfront property?
  • Do you want to be near a specific healthcare facility or retirement community?

Ultimately, it is helpful to do your research and connect with a local attorney and realtor. Depending on how you plan to use the property (residence vs vacation vs rental), your priorities will be different. Do your due diligence on the area’s specificities and the neighborhood of the property to determine where you should buy a second home. It is worthwhile to consider things like curb appeal, access to outdoor activities, safety, traffic, and more.

Leverage expert guidance

Owning a second home in Florida is a great way to increase your real estate assets and net worth, all while soaking up the sun. While the benefits are clear, it’s important to consider your budget, where you’d like to live, and how you’d like to use the property. You need strong advisors in your corner when buying a home in a state thousands of miles away from your primary residence. An experienced and local real estate team will make all the difference in your Florida home-buying process. Their specialized knowledge will get you up to speed on the differences of the market, and they can be a resource to you for local amenities in Florida. If you’re looking to buy a second home in Florida or are interested in learning more about the Florida real estate market generally, contact our Florida state manager, Thomas Melega.

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