The real costs of owning in Florida

Before a buyer makes an offer we build them the same table: six annual lines, carrying the real number for that address rather than an average. This is the table.

1. Property tax

It is assessed on the county's appraised value, at a rate that depends on the municipality. Two warnings that cost money: the homestead exemption, which caps how far the assessment can rise each year, does not apply to a second home or an income property. And the assessed value is generally reset to the purchase price the year after a sale, so the tax the previous owner paid is not the tax you will pay. That is the most common and the most expensive mistake.

2. Condominium dues

Monthly, and in amenity-heavy buildings it is the line that surprises people most. It covers the master policy, the common areas, the staff and the reserves. Look as well at the special assessment history over the last five years: a low monthly due in a building that funds itself through assessments is not a low due.

3. Insurance

The building's master policy covers the structure; you insure the interior of your unit and your own liability. If the property sits in a flood zone, flood cover is bought separately and is not optional where there is a mortgage. Florida premiums have repriced hard; get both quoted before you fix the budget, not after you sign.

4. Management and vacancy

If you let, management is charged as a percentage of rent collected, usually plus a fee each time a new tenant is placed. And budget for vacancy: a calculation that assumes twelve months of rent a year is an optimistic case, not a budget.

5. Maintenance

The interior is yours: appliances, air conditioning, water heater, paint. In salt air and humidity equipment lasts less well than in a dry climate, and the air conditioning works all year.

6. The structure

The LLC carries an annual renewal with the State of Florida and an annual filing, plus the bookkeeping that keeps it in order. It is the smallest of the six lines and the only one most people do remember.

Added up, these six lines are the difference between the yield in a listing and the yield that reaches your account. We would rather that number disappoint you on a call than surprise you in January.