It isn’t just the weather that is sizzling in Florida, and there are many things to consider when making an investment in the south. Whether it’s personal, professional or for pleasure….here are the top things to keep in mind before you buy.
Why Buy A House In Florida?
Whether you’re a snowbird or a townie, Florida real estate can be a solid investment. People are flocking to Florida, and if you own a piece of it the value could rise as the state increases in popularity. Looking to put down roots by owning a home or looking for a sunny place to purchase a vacation property, now is a great time to start.
A Florida home can be a solid investment. Rental properties often have a great return, and if you hire a property manager you can eliminate the stress of not being local to maintain the property and enjoy your passive income.
- Know your market
Timing is everything when buying. Understanding your market is essential, knowing whether it’s a buyer’s or seller’s market. If certain areas are outside of your budget, look for up-and-coming neighbourhoods. Connecting with a credible agent that you trust who can educate you on the areas to avoid and what opportunities might be up-and-coming and lining up properties that align your individual needs is key to a successful buying journey.
Most of the state of Florida is an attractive real estate market, with many properties for sale and a lot of interested buyers. Depending on the city and neighbourhood, the market may be competitive.
- Research your financing options
Your agent will be your best resource for connecting you with local mortgage brokerages. They can help you discover financing options you may qualify for, such as first-time homebuyer grants and programs like down payment assistance, subsidized mortgage loan programs and favourable mortgage rates.
- Florida property taxes
Florida is a Homestead state. The Florida Homestead Exemption allows homeowners to claim up to a $50,000 exemption on their property taxes. However, this does apply only to primary residences. The state’s average effective property tax rate is 0.98%. Keep in mind property taxes vary by county.
- Necessary homeowner insurance protection
It is essential to consider different weather events like hurricanes when projecting homeowners insurance. We never like discussing the downside of relocation, but it’s always best to stay well informed. Often standard homeowners insurance doesn’t cover things like flooding, so for example, you’ll need to take out separate flood insurance or risk devastating losses due to a hurricane.
- The laws of the land
Like most, you’re on the hunt for that oceanfront view. However, if you plan on buying oceanfront property, you will want to be informed of the different laws about your land. For example, particular vegetation cannot be removed, or you may not be able to use light during turtle nesting season.
- Understanding Homeowners Associations (HOA)
Homeowners Association (HOA) that creates and enforces rules are really quite common in Florida. The HOA’s job is to ensure the neighbourhood stays in good shape so home values don’t decline. It’s important to research and understand if the property you are considering has any restrictions and requirements you may have to adhere to.
- Financial investments
Buyers and sellers have many different fees to pay at closing. Closing costs in Florida are among the highest in the country. To avoid the high closing costs, a buyer could pay in cash, negotiate that the seller pays all or a portion of the costs, or see if you can roll the closing costs into your mortgage.
Title insurance might be something you have to consider when closing on your home. The party responsible for paying title insurance depends on the county where you’re purchasing property, be sure to look into this beforehand.
You will want to be sure to have a decent down payment ready before you start looking. Florida is home to beautiful beaches, exotic wildlife, and many foreclosures. Because of the high number of foreclosures, private mortgage insurance for conventional loans is unavailable in many areas. Expect to have a 20 – 25% down payment on a single-family home ready to be approved.
Florida’s popularity is growing every year. Whether you’re buying an investment property or a primary residence, knowing what to expect going in will impact your outcome.
I want to ensure the best care for all of my clients. I know many of you have expressed interest in investing down south, so I have partnered with my friend Kristin Windsor. Kristin is a Florida, U.S. Native who relocated and lived for 15 years in Kingston, ON. She has since returned to the sunshine state to jump head first into her real estate career. Kristin and I are ready to help you follow your dream of sunny days in the South.