Rules of Thumb regarding costs in Florida

Rule of Thumb - costs in florida

I like to give answers to questions people pose to me.  I’m not an engineer or a statistician, I’m a sales guy. As a sales guy I don’t want to get hung up on a detail – I’m shooting the big picture, and order to share that big picture, sometimes I have to rely on “rules of thumb”.  The origin of that expression isn’t clear – but in the accepted meaning is an approximation or accepted answer that is generally true. Not totally accurate, but good enough for discussion purposes. I am going to share with you some rules of thumb in the Florida Real Estate costs that I can guarantee you will make the former kid that used to sit in the front of the class in fifth grade squirm because he knows the exact number or the reason why mine is wrong.  But for painting a big picture, this broad brush is just fine for giving you an idea on costs in Florida that you can expect.

My favorite rule of thumb, by the way, is concerning the weather. I’m famous for not listening to the weather report unless I have something really important that involves an outdoor activity – because the weather tomorrow will always be like today, just a little bit different. I’m right most of the time anyway.

But for those of you that are thinking of buying real estate in Florida, you should be trying to budget for things. Here are some snippets that might be of help.

Property taxes in Florida 

“How much will the property taxes be on my purchase?” 1.5% of the purchase price. It could be 2%, it could be 1.4%.   The rate will  depend on whether or not you have a homestead exemption, if you are in the city or not, and just like all rules of thumb there are exceptions. The county here has a calculator that you can use (estimated tax calculator) but it’s just a rule of thumb.

What about property insurance, what will that cost? 

My answer: 1% of the price of the home, per year, and  its going up. Fast. My insurance company, Dean Street Insurance  cringes when I use that 1% number. They don’t like rules of thumb.  But the 1% assumes that the house is not in a flood zone, was built to current hurricane code, and it passes a four point inspection.  Insurance costs, by the way, can kill a deal. I always get Dean Street to prepare a preliminary quote on any house a client of mine is looking at. These guys and gals at Dean Street specialize in working with real estate buyers and are the best. I recently was negotiating the purchase of a home way inland and wasn’t worried about insurance costs, but it turns out the house was in what’s called a sheet flow flood zone and the insurance costs made the home unaffordable for my buyers. We were so happy we got that insurance quote from Dean Street.

Condo and HOA Fees

These fees are expressed as a price per square foot, per month. Most fees range from $.25 to $.50.  Fortunately, we can look these up on the property listing, but for my rule of thumb I assume $.25/sf for a new product off water, and $.50/sf on water.  The amenities and services offered vary from association to association so these numbers are better verified and there is little need for a rule of thumb.

How long stuff will last

Looking at a ten year old home? Then the are things that are due to be replaced if they have not been already: Hot water heaters and central air units will top that list (7 to 15 year life expectancy). The paint, window caulk and all the kitchen appliances should also be on that short list. For a complete list of life expectancy of housing components go to InterNACHI’s life expectancy charts, it’ absolutely FULL of rules of thumb! (Fascinating charts – it’s worth hitting that link)

Cost to sell your home? 

8% (Commission, title insurance, legal)

Cost of electricity in Florida?

I really never use a rule of thumb here since the local utility company will share with you the electric costs for the home you are thinking of buying.  Here is a good link that will help you however. New homes are SOOOO much cheaper to cool than older ones.

Cost to move to Florida? 

PRICELESS! You can’t afford not to!


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