Consider The Costs Involved

A while back, I wrote about making an offer on your chosen property and carefully considering additional costs that are involved in the purchase and upkeep of a vacation home in Florida. To some, these costs could be a rather heavy burden, more so than anticipated. It's an interesting topic, one that I thought I would revisit in a bit more detail.

Because of the U.S. property crash and current financial uncertainty, it is true that there are some real bargains to be had in Florida. However, don't forget to factor in the following costs:

Taxes
You will, of course, have to pay annual property taxes - for example, on a one-bedroom property in Broward County, taxes are approximately $3,000 per annum.

Insurance
This can often be much higher than people expect as it features "hurricane clauses" - on account, of course, of Florida being at risk of hurricanes! There's no one policy that will fit for everyone, and you'll really have to speak with an insurance agent to fine one best for you, depending on what your property is and where it's specifically located. You might find some useful information on the Florida Office of Insurance Regulation website.

Condo Association Fee
If your property is part of an condominium association, you'll have to pay monthly fees that pay for the maintenance and upkeep of common parts of the development - gardens, car park, pool and so on. Again, the exact amount depends on the type of development, how large it is and so on. You will probably have to pay between $140 - $200 per month.

Utilities
It's hard to budget for utilities - specifically electricity - as you're unlikely to know how much use your holiday home is going to get. Keep in mind that you may have to run some appliances even when you're not there. Summers are very humid, so you may have to program your air conditioning unit(s) to come on intermittently to prevent against mould forming on the walls.

Management
Depending on how often you plan to visit your vacation home, you may decide to opt for an estate agent's management service. This will most likely include regular inspections of your property to make sure everything is in order, and payment of bills via your bank account. Expect to pay about a minimum of $100 per month for management; more if maintenance is required in any particular month.

Furthermore, don't depend on trying to rent out your property to raise some income. There is a great oversupply of properties for rental. According to Florida newspapers, some landlords are even giving out six months' free rent on a (for example) 2 or 3 year lease.

Even hiring out your property to holidaymakers brings up further costs: regular cleaning, maintenance, paying for utilities, rental fees (if appropriate) and so on.

You've probably already factored in mortgage and furnishing costs...so remember to budget for them too!

Photo: Hollywood Beach, January 2008