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Post Date: May 23, 2024

Tips for Owning a Second Home in Florida

Tips for Owning a Second Home in Florida

A second home not only adds pleasure to your life but can also support a wealth-building strategy to finance your retirement years. These outcomes do not happen overnight. You may buy a second home in Florida years before you retire. The property initially serves as a vacation home but could become your primary residence once you retire.

How you integrate a second home into your retirement plan will depend on your personal goals and financial position. Here are some considerations as you look to get the most out of your investment.

Choose Your Financial and Lifestyle Goals

To optimize your retirement plan, decide whether to keep both homes after retirement or sell your original home and transition to full-time life in what began as your vacation home.

Retaining ownership of both homes may appeal to you if your first home is near family or in a location you love. However, your budget might not accommodate the expense of maintaining two homes after retirement.

An article from Chase explains some common approaches retirees take with second home purchases:

  • Secure a place to stay for frequent trips to a desirable vacation destination.
  • Pay for a place to live after retirement while still working.
  • Vacation in the home part-time and collect rental income for the rest of the year.
  • Move to the vacation destination after retirement and collect rental income from the original home.

The approach that you choose will direct your retirement financial planning. For example, if you want to keep and live in both homes part-time, you need the savings and income to support both properties.

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Whether or not to rent out either home also shapes your budget. Rental income enables more options but incurs more property management expenses and dealing with tenants.

Additionally, if you plan to rent out your second home occasionally, market research plays a significant role in your buying decision. Local rental rates have to be high enough to cover expenses.

A plan based on rental income also requires making sure you buy a home in Florida you can rent out. A homeowners' association (HOA) could have rules prohibiting short-term rentals or any renting. If a property is part of an HOA, carefully review its covenants, rules, and regulations to confirm that there are no impediments to your business plan.

Multiple factors go into how to pay for a second home. Consultations with a financial adviser with experience in real estate could prepare you to make well-informed decisions that promote financial security during retirement.

Second Home Financing

Paying cash for a second home is the easiest approach but not always viable. In that case, you need a loan. Even if your first home is paid for and you have the income for a loan on a second home, you may incur a higher interest rate. According to the AARP, some lenders feel more secure lending people money for their primary residences instead of second homes.

Chase confirms the reality of higher interest rates on second-home loans because they do not qualify for government backing. You will also want a down payment of 20% to 25% to avoid paying for private mortgage insurance (PMI).

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Good Investment Potential

A second home could be a good investment even with higher borrowing costs. Financial advisers have long recommended real estate as a way to preserve capital outside of volatile securities.

Although real estate lacks immediate liquidity, it usually appreciates over the years. Real estate could keep pace with inflation, or even outpace it, in a location such as Florida that offers an impressive quality of life.

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Total Costs of Second Home Ownership

The initial purchase price is not your only consideration. As you know, a house requires ongoing taxes, insurance, and maintenance payments. Before committing to a purchase, obtain reliable quotes for these expenses and calculate how they will impact your retirement budget.

How to Choose the Location of Your Second Home

  • Consider Travel Distances
    A good Florida location will be a place that you already appreciate as a vacation destination. However, you want to avoid a location that is too hard to visit regularly. You can get the most out of a second home when you choose a convenient spot to travel to.

    You should also consider the ease of travel for family and friends who may visit. Choosing an area that is difficult or expensive to reach may be problematic for some.
  • Aging in Place
    Many retirees enjoy active lifestyles, but everyone inevitably feels the effects of aging. As the decades pass, stairs increasingly present challenges to hurting knees and hips.

    All of this means that a second home for retirement should be one level or at the least have a main bedroom and bathroom on the first floor. It is also important to prioritize wider halls and doorways. Homes with these features ensure adequate access should you develop physical problems or need a wheelchair.
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  • Healthcare Services
    Older adults frequently choose to live near large hospital systems. Rural or remote areas may lack easy access to healthcare facilities.

    The good news is that most Florida locations that attract tourists and retirees are close to cities with advanced healthcare facilities. As long as the place where you hope to buy a second home is near a major city, you should have good luck pairing a beautiful place to live with access to quality healthcare.

Luxury Second Homes in Central Florida

Central Florida, particularly the Orlando area, is a prime destination for those seeking a second home. Renowned for its world-class theme parks, attractions, and dining, Orlando also boasts excellent medical services and care.

Bella Collina offers second-home buyers an ideal blend of location and amenities for an active lifestyle close to nature, with convenient access to popular attractions and healthcare facilities. Nestled on the shores of Lake Apopka and our private Lake Siena, our gated community features peaceful green hills and secure access, ensuring tranquility and luxury.

Bella Collina Clubhouse Atrium

Highlights of Bella Collina include a 75,000-square-foot clubhouse overlooking an 18-hole golf course designed by Sir Nick Faldo, providing a premier golfing experience and home to the Orlando Golf Academy.

Additional community amenities:

  • Luxury events venue
  • Fine dining
  • Day spa
  • Fitness center
  • Swimming pool
  • Tennis and pickleball courts

Bella Collina Clubhouse Fire Pit

Whether you dream of building a custom home, want a low-maintenance, luxury condo, or something in between, we have a real estate solution that match your vacation and retirement goals.

Talk to us today to learn more about establishing your second home in Bella Collina.

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