You have decided you’re ready to invest in a vacation home in Central Florida. Great! Before you make an offer and sign on the dotted line, make sure you understand all the additional costs that might be associated after you close on the home.
Home Owner’s Association, Condo Fees, or Resort Fees
There are many amenities offered in the public spaces of Central Florida vacation home communities such as resort style pools, landscape maintenance, and manned security gates. These expenses are paid for are through resort and homeowner association fees.
Fees vary in each community, but it is an ongoing charge beyond your mortgage you will need to pay to be a part of the community. If these fees are not paid, the homeowners association can place a lien on your home.
Before you purchase, it should be very clear how much HOA fees are so you can add that to the consideration of your home purchase. These fees are usually higher than HOA fees for a primary home because there are many more amenities than a typical residential community.
Property Management Fees
It is essential to have a property management company for your home if you don’t live within driving distance and want to rent it to vacationers. Maintenance fees cover management of your private property like lawn care, pool maintenance, minor repairs, and other types of routine checks. Property management companies can also assist you with all the tasks that need to be managed when you have short-term guest renting the property.
Marketing Costs
Planning on renting out your vacation home? Marketing is critical to find guests to fill your home. Many property management companies include this as an option within their fees. However, if you choose to go about marketing your vacation home on your own, expect to shell out costs on many of the popular websites vacation homes are typically featured on. No matter what route you choose, if you want to rent out your home, there will be additional marketing costs to consider.
Viva Orlando Note: Our sister company Casa Floridian will help you do double duty. They’ll help you manage the property while you’re away, act as a guest liaison, and market your home within their website and marketing channels. Visit CasaFloridian.com to find out more.
Furnishings
Vacation homes are typically second homes, so you won’t be able to move all your current furniture into your new space. Before you purchase your home, think about how many bedrooms and common areas you want and what it will cost to furnish the entire home. Remember to consider the sturdiness of the pieces you choose too if you will be renting out your home to guests.
Repairs
Just like any other home, a vacation home will have repair needs over the life of the home. Even if you purchase your home brand new, we suggest you should budget about 1.5-2% of your home’s value to maintain the cost of the home. Overall maintenance costs for vacation homes can be a tad higher than a traditional home because guests are typically harder on the home than a primary homeowner would be. If you want to maintain the value of your home, you’ll need to maintain it properly.
With new construction homes you lessen this expense as you receive the benefit of warranty for the first couple of years, and of course because they are new, you will rarely have need for major repairs, (except for those cause by guests) during the first 5 years.
Property Taxes
In Florida, if your home is not your primary residence, your property taxes will increase about 28%. Approximately 2 to 2.5% of the value of your home. We will be able to help you calculate property tax costs before you close on the home.
Homeowners Insurance
Unlike your primary residences, the homeowner’s insurance on a vacation home can be more expensive if you are renting it out to guests. That additional consideration might make you pay up to 25% more on your monthly premiums because of additional risks of housing renters.
Utilities
Plan on renting out your home to vacation guests? Then, it’s a business and to keep it running, electricity, water, cable, internet and phone should be active at all times.
You will need to make sure you budget for additional monthly utility costs. In Florida’s hot summertime climate, the air condition is a must and can cause utility costs to be higher during peak tourist times. In addition, guests don’t usually consider these costs and will use more electricity and water than they might if it were their own home, driving up overall utility costs.
State Sales Tax on Rental Income
If you want to make an income from your vacation property, you will have to pay taxes on the income you make from the rentals.
Viva Orlando is here to help you through the process of purchasing your dream vacation home. We’re experts in the unique needs of the vacation real estate market and can help you navigate any questions you might have about the purchase of your next home or any additional costs you might have after closing. Contact Milena@vivaorlando.com to find out more.