Some words of wisdom on buying a vacation home in Florida from highly respected and highly experienced realtor Tom Schmidt
First, what is your motivation? Most second-home buyer's want a vacation spot, an investment property, a retirement home, or some combination of all three. Before you identify sites/locations, you need to figure out your vision and consider whether home No. 2 is a realistic fit for your lifestyle.
Second, find a real estate "buyer's agent". Connecting with a good agent is CRITICAL. If you wait to set an appointment with an agent until after you're already on vacation, you may be out of luck. In very popular spots, real estate agents often hesitate to spend time with vacationers for fear that they'll only serve as glorified tour guides.
Third, get mortgage preapproval. By doing the paperwork to get the lender preapproval, you'll get your financial house in order and decide on the down payment and monthly mortgage payment you can afford. Although you may be counting on rental income to pay for a large portion of your mortgage and expenses, don't get in over your head. Make sure you're willing to take a short-term loss in rentals.
Fourth, think about taxes. How you use your second home will determine its impact on your taxes. For instance, if you rent your vacation property, but stay in it at least two weeks a year, you can deduct your mortgage interest and property taxes. An investment property that's rented out and never used for personal pleasure will be subject to different deduction standards, so check with a
In conjunction/addition with above, here are some basic DO'S and DON'TS to consider:
* Choose a real estate "buyer's" agent, who will have the minimum
*1. 2 to 3 years of experience in the area you need/want.
*2. A member of the National Association of Realtors (NAR).
*3. A member of the local real estate board/realtor association.
*4. Having additional real estate "designations/member of real estate professional organizations". This will demonstrate the agents commitment to real estate excellence and professionalism.
* Have a U. S. Checking Account
* Plan to be pro-active in bookings/renting, if rental income is an
important criteria in purchasing a property
* Plan on at least a 20% to 25% deposit/down payment
* Plan to spend a week for property hunting/purchasing
* Purchase without being familiar with the area/communities
* Purchase "off plan"/new construction without physically seeing
the location and being aware of other "opportunities"
* Consider guaranteed rental income "scheme's" in connection
with a purchase
* Purchase on a "whim"
In addition to the purchase planning stages, house/property hunting, and actual purchase, other "items" involved will be:
- Selecting a Management Company
- Selecting House Insurance
- Selecting a Furniture Company
- Making arrangements for closing/completion
- Preliminary and Final Property Inspections
- Selecting an Accountant
- Applying for a Tax Identification Number(TIN - for foreign buyer's).
An experienced professional Real Estate Agent will be able to assist you in all of the above "DO" items, helping to insure a smooth and uneventful "transaction process", prior to, during and after the closing/completion !
Doing a little legwork/homework up front, will pay off ! And if all goes well, you'll be seeing a lot more of your piece of paradise in the future.