3 Reasons Why Purchasing and Maintaining a Florida Vacation Home Is Affordable
By: Jim McKinley – Money with Jim
Photos: Laura Jennings Photography
Florida is a popular destination for retirees and other small-time real estate investors. If you’re thinking about purchasing a Florida vacation home but aren’t sure you can afford it, think again. There are several ways to make your dream vacation home a reality.
- You Can Rent the Home to Supplement Your Income
Do not purchase a vacation home as your sole investment. You will make more money working with an advisor to invest wisely in other areas. But, you can supplement your income by using your vacation home as a rental property. You also can use the rental income you expect to make to help qualify for your loan to purchase the property.
Your rental income will help cover mortgage payments and maintenance costs. In fact, the Boston Globe reports that the average vacation rental owner “grossed $28,000 in income last year—and three-quarters of them earned enough to cover more than half of their mortgage.” Keep in mind that you will need to figure in the total cost of the home to determine how much the rent will supplement your income. You will also have to put money into the home to get money out of it.
- Maintenance Costs Are Lower Than Repair Costs
As with any home, a Florida vacation home will require regular maintenance to keep it in peak condition, especially if you plan to rent it. Regular maintenance is the way to go to keep your costs low because it is one way to avoid unexpected costly repairs. For example, the hot sun and saltwater can cause damage to homes in Florida quickly. You would be wise to hire someone to pressure wash the home and keep its exterior in good repair rather than suddenly discovering issues with your siding after failing to maintain it.
Of course, the more time you spend in your vacation home, the easier it is to stay on top of maintenance. An affordable alternative to hiring a professional property manager to oversee your vacation home is to get to know your neighbors so they can alert you when something is potentially wrong with your property.
One of the best ways to save on repair costs is to ensure you have made disaster preparations for the home during hurricane season. You should have plywood cut to fit windows and doors and have emergency supplies on hand for yourself or your renters. You also should ensure that your HVAC system is ready for hurricane season because it is one of the most expensive systems in your home.
Having a preventive HVAC maintenance check is one way to make sure your system is ready to survive the storm. If a storm does hit, be sure that you, a renter, or a neighbor is prepared to shut off the breaker to your HVAC unit to decrease the possibility of damage and resulting costly repairs.
- The House Will Appreciate in Value
You don’t have to splurge on an extravagant vacation home for it to appreciate in value and increase your assets. Real estate is an investment, and if you purchase a quality home in a desirable location, you can expect to see your vacation home value increase, according to the Chicago Tribune. You’ll also be eligible for some tax benefits when you purchase a second home, including the ability to deduct your mortgage interest and real estate taxes.
In fact, some people who purchase a vacation home choose not to rent it because of the income tax implications. Typically, if you rent the house for more than 14 days, you have to report your rental receipts as part of your taxable income. Your maintenance fees also will be lower if you are the primary occupant of the property.
If you dream of owning a vacation home in Florida, you should consider how to make your dream become a reality in an affordable way. Consider renting the home when you aren’t vacationing as a way to supplement your income. Also, prioritize regular home maintenance for the property. The better care you take of the home, the more it will appreciate in value.
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