Expenses to Consider When Renting Out Your Second Florida Home
Do you have a second Florida home that sits unused for portions of the year? If you do, you should consider renting it out. You could offer a long-term lease or short-term stays through sites like Airbnb. However, there are expenses that come with opening your property to renters. Experts say that many first-time landlords don’t realize how quickly the overhead and incidentals can add up.
Here are the biggest expenses that come with renting out your property.
Fixed Expenses
Whether or not you rent your second Florida home, you’ll have to pay the monthly home loan, as well as the bills for:
- Cable TV
- Cooling
- Trash
- Water
- Other utilities
- Your HOA or POA fees
Maintenance Costs
You will have maintenance costs when renting your second Florida home. This is because many people will be coming in and out of your home. The same breezes that bring people to Florida will tear your screen door off its hinges and slam it into a light fixture. The Florida sandy beach salt will also eat away at the exterior of your house.
Marketing Your Second Florida Home
How do you plan to let a tenant know your second Florida home is up for rent? They won’t unless you market the property, and marketing costs money. Here are some ways to advertise:
- Real estate management company: They will expect 20-50% of the rental income. Go ahead and call around. Ask about what the fee will include and where the firm advertises. Do they have a rental magazine? If so, how many properties are listed? How often will your property be in it? How many people are on the mailing list?
- Make your own online web site
- Go through a site like Airbnb
- Advertise your second Florida home through classified ads like Craigslist
Flood Insurance
It has become more expensive to get flood insurance since Hurricanes Katrina and Rita. Your flood insurance costs will depend on several things with your second Florida home. This includes:
- Location
- Height above sea level
- Age of home
You may need to buy private flood insurance in certain parts of Florida. Remember, Florida flood insurance policies will not cover damage caused by wind and rain.
Hurricane and Wind Insurance
Wind and Hurricane insurance is a separate policy in Florida. You will have to buy it from the Florida state insurance pool. This type of insurance may be hard to get in certain hurricane-prone areas and can be pretty expensive.
Landlord Insurance
It is optional to get landlord insurance, but it’s a good investment. Generally, it costs more than a normal homeowner’s policy. It offers a lot of great coverage, however, that will protect you and the property. For instance, this policy will cover the property if it burns down because the tenant starts a fire. If you were renting a property with normal homeowners’ insurance on it, the insurance company would be able to deny your claim.
You need to remember that there is a difference between a landlord policy for a long-term renter and a policy for short-term vacation rentals. Make sure to get the right policy for your property.
You need to understand all the costs that come with renting a home. It will help you determine if buying a second Florida home is the right decision for you. Give us a call if you are planning to buy a home in Florida. We will happily help you find one that fits your needs.