Author Topic: Florida Real Estate  (Read 9971 times)

GrayGhost

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Florida Real Estate
« on: July 02, 2014, 09:12:13 AM »
No derailing intended [MOD EDIT: Very off topic; split to new thread.], but what do you guys think about RE in Florida? I've come across a few parcels of condos there that have okay numbers, but it's Florida, where everyone goes to retire and vacation. Better yet, rent is often below market, and even better, if you sell condos piecemeal, you can probably do so for 30-40% profit, easy.

It's certainly something I need to look into seriously, but I am intrigued. If I came across numbers like the ones I'm seeing in Florida closer to home, I wouldn't give it a second look, but I've found a few deals for waterfront condos for about $120k a unit, where rent is about $1k per month when it probably needs to be $1.2k a month, and when similar units are going for $180k. I really am seriously intrigued, although it would be a big gamble to say the least!
« Last Edit: July 02, 2014, 09:28:21 AM by arebelspy »

arebelspy

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Re: Florida Real Estate
« Reply #1 on: July 02, 2014, 09:30:23 AM »
I think there's some good opportunity in Florida, and I like the potential upside due to the exposure to the international market, but what you described sounds like the opposite of what I'm looking for.

If you wouldn't give it a second look at home, why would you want to long distance?

I think there are some good numbers to be found in FL - that isn't it, IMO. (Think: Multiple exit strategies.)
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GrayGhost

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Re: Florida Real Estate
« Reply #2 on: July 02, 2014, 10:05:29 AM »
The reason is that Florida waterfront condos are likely to appreciate much faster than anything in suburbia. That's the seller's justification for the high price, and I think they've got a point. Another bonus that the seller is willing to throw in is that he'll pay HOA and taxes for two years, which gets cash on cash return for that time period up to 15-20% annualized.

After that, the numbers for renting aren't great at all, but they are quite impressive for buying several condos and selling them off piecemeal.

arebelspy

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Re: Florida Real Estate
« Reply #3 on: July 02, 2014, 10:50:59 AM »
Another bonus that the seller is willing to throw in is that he'll pay HOA and taxes for two years

Ask yourself why this is.
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GrayGhost

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Re: Florida Real Estate
« Reply #4 on: July 02, 2014, 11:39:11 AM »
The obvious answer is that the HOA fees are really high (something like 30% of monthly rent), however, they do cover security arrangements, flood and structural insurance, pest control, lawn maintenance, and others. In other words, almost all expenses (other than management and interior work) are covered by HOA fees.

I assume that the seller is willing to pay HOA fees in order to make the deal more attractive, especially since his asking price is near what you'd expect to pay if you were to buy one unit to live in. I've done some research on the community itself and it seems owners and tenants both quite like it, so I don't know that there's anything severely wrong with it.
« Last Edit: July 02, 2014, 11:42:10 AM by GrayGhost »

arebelspy

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Re: Florida Real Estate
« Reply #5 on: July 02, 2014, 12:20:22 PM »
I assume that the seller is willing to pay HOA fees in order to make the deal more attractive

Right.  And why would they need to do that?
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GrayGhost

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Re: Florida Real Estate
« Reply #6 on: July 02, 2014, 12:31:42 PM »
The only way this deal works is if we flip the condos immediately and sell them for full market value, but that may be hard to manage remotely, and it really makes me question why the seller hasn't done it. Something may well be fishy here.

Anyway, I see where you're going. I think you're right. I've had to make so many excuses and exceptions for this deal, and I've been telling myself, "Self, it's alright, it's in Florida, you can afford to lower your standards a bit." I can afford to pass up this opportunity. There will be other, and better ones, in the future. Just because it's a bunch of waterfronts in Florida, doesn't mean that I should bend the 1% rule to the breaking point. And as for remote piecemeal selling, it's just not something I have a need to do, and I haven't enough experience yet to be comfortable with the process.
« Last Edit: July 02, 2014, 12:35:16 PM by GrayGhost »

arebelspy

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Re: Florida Real Estate
« Reply #7 on: July 02, 2014, 12:43:17 PM »
The only way this deal works is if we flip the condos immediately and sell them for full market value, but that may be hard to manage remotely, and it really makes me question why the seller hasn't done it. Something may well be fishy here.

Anyway, I see where you're going. I think you're right. I've had to make so many excuses and exceptions for this deal, and I've been telling myself, "Self, it's alright, it's in Florida, you can afford to lower your standards a bit." I can afford to pass up this opportunity. There will be other, and better ones, in the future. Just because it's a bunch of waterfronts in Florida, doesn't mean that I should bend the 1% rule to the breaking point. And as for remote piecemeal selling, it's just not something I have a need to do, and I haven't enough experience yet to be comfortable with the process.

I agree with all of that.  :)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
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clarkfan1979

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Re: Florida Real Estate
« Reply #8 on: July 03, 2014, 08:58:55 PM »
Florida has some good numbers. However, I don't think they exist in condos. FL passed NY in total population this year. FL is now the third most populated state and growing. I am optimistic about FL for the long term 10-20 years.

Daisy

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Re: Florida Real Estate
« Reply #9 on: July 03, 2014, 09:02:59 PM »
Another bonus that the seller is willing to throw in is that he'll pay HOA and taxes for two years

Ask yourself why this is.

RED FLAG, RED FLAG.

I am currently trying to sell a house in Florida. I have heard that some houses are moving fast soon after listing. I guess it depends on the asking price. I have not found that with mine, but am hoping to get a sale done over the summer.

But I would never offer to pay HOA and taxes for two years. Something's going on there. Why wouldn't they just lower the asking price for the equivalent amount?

What part of Florida? The market may be different in different parts of Florida.

GrayGhost

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Re: Florida Real Estate
« Reply #10 on: July 03, 2014, 09:24:22 PM »
Yeah, I was sort of curious about that as well, why not just lower the selling price and forget about paying HOA fees and taxes? A small part of me suspects that the seller is selling through some business arrangement that will mysteriously go bankrupt soon after closing, but that's a worst case scenario.

In any case, this deal is very much on the backburner for me. I haven't responded to the seller's agent for some time in order to put the pressure on and try to get a straight answer as to what's going on here.

irishQ

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Re: Florida Real Estate
« Reply #11 on: July 07, 2014, 06:39:11 PM »
could the seller be a guy like you who thought he could flip them and make 15-20%?

the fla apt to condo conversion that happened in the 03-08 time frame was nuts - freaking nuts!

banks require 20% down on all condos (if they even finance one) and they run the comps to check end users or tenants. - so you need well qualified buyers. if you want to rent, bylaws now cover maximum allowed rental units, what happens if it is already or soon to be maxed out, you wont be able to rent anything.

HOA fees eat you alive in a condo. (a few retirees wake up one day and say "sol, you know the pool could be bigger..." and $10,000 in assessments later) now imagine another block of condos not paying the fee, guess who has to cover? these near salt water? ugh- now we are talking about structure repairs new a/c and such on a much faster replacement cycle.

stay away - far far away.

sobezen

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Re: Florida Real Estate
« Reply #12 on: July 07, 2014, 07:48:51 PM »
What do people think about just undeveloped lots of land in Florida?  I've known people who've done reasonable well buying these lots and then reselling them to developers.  Thoughts?  Does anyone have any experiences that they'd care to share?  Thanks!

Daisy

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Re: Florida Real Estate
« Reply #13 on: July 08, 2014, 05:14:52 PM »
Yeah, I was sort of curious about that as well, why not just lower the selling price and forget about paying HOA fees and taxes? A small part of me suspects that the seller is selling through some business arrangement that will mysteriously go bankrupt soon after closing, but that's a worst case scenario.

In any case, this deal is very much on the backburner for me. I haven't responded to the seller's agent for some time in order to put the pressure on and try to get a straight answer as to what's going on here.

Come to think of it, once I did offer to pay off a special assessment on a townhouse I was selling. We had a special assessment for a new roof for the whole community that I only had about 4 months left to pay for. I was selling the place to someone at my company so we were forgoing any realtor commission fees. The guy was a friend of a friend. So I was selling him the place by advertising the new roof. I thought it was only fair to just pay the future special assessment off. It could be that I knew the guy beforehand and he really saved me some money by not paying commissions to any realtors.

Liz498

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Re: Florida Real Estate
« Reply #14 on: July 09, 2014, 09:14:40 AM »
I think it depends where you buy. If you look at some of the areas with the best yields, a couple of Florida counties are in there and a state average fair market rent is just over $1000, which while not as high as CA or NY is still makes it one of the more expensive states. So I would do my research and look for the Florida markets where rentals are in demand and potential yields are good.

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Re: Florida Real Estate
« Reply #15 on: July 10, 2014, 03:34:53 PM »
Another bonus that the seller is willing to throw in is that he'll pay HOA and taxes for two years

Ask yourself why this is.

It's all about value.  Clearly the seller feels that there's little value in the property, so he's trying to make the deal look better.  Wonder if he would keep paying if the rate went up?  Deals like that are fun for me as an agent because you just know you can lowball them.  I mean, with an offer like that, they are practically asking for it.

GrayGhost

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Re: Florida Real Estate
« Reply #16 on: July 21, 2014, 06:41:35 PM »
Note to ARS and other mods: feel free to break this post off into another thread if you think it's appropriate. I will not be offended. :)

So I have recently found out that I will be working on a space program at Cape Canaveral, Florida, starting sometime in October. While I am quite excited about my job, not to mention living in Florida (no more shoveling snow for this chico), another object of my interest is, as you might guess, real estate opportunities in the Cape Canaveral, Florida area.

Upsides:
GREAT job market. There's a huge military/space program presence there, and that isn't subject to change
Gorgeous location. This brings in a lot of retirees, tourists, vacation home owners, et cetera

Downsides:
Insurance costs. I can only assume that owing to the risk of hurricane and other storm damage, insurance costs will be quite considerable in Florida, especially right on the coast.

After a consideration of the facts at hand, I believe that my interests are best served by engaging in a slow flip. Essentially what I would like to do is to buy a foreclosure or fixer-upper-lite with a friend or coworker, and fix it up while living in it for two or so years. We would then sell it for a profit and head on to our next assignments and such.

I believe this is a wiser course of action because I don't have anywhere close to the money needed to buy multiple properties, so I can't take advantage of economies of scale.  Plus, if I wanted to rent out a property from multiple states away, I would certainly have to get a property manager. I would much rather take a lump payment of a few tens of thousands of dollars and wash my hands of the affair. I also don't have the money to finance a traditional flip, which is why I would have to search for a property that is in liveable condition--it needs to be kosher as far as lending institutions are concerned.

I guess my questions are as follow:
Is my thinking sound?
What pitfalls do you see in my plan? (The obvious one is finding the right guy/guys to enter the deal with, if I am not able to do that, I guess I'll have to contract work that I can't do alone out)
Does it make sense to sell rather than hold if I only have one property (particularly if it's jointly owned) and I am halfway across the country?
Do you know anything about buying foreclosures and REOs/short sales in Florida?
Are there any concerns that apply in particular to Florida properties?
How should I look for deals in such an area? Currently, my plan is to find and hit up real estate agencies that seem to know about foreclosures and let them do the searching and scouring for me, while I simply look at the numbers: cost of purchase, cost to repair, after repair value, et cetera.
Since I intend to do a slow flip, how should my adherence to the 70% rule change, if at all?

All feedback is greatly appreciated, thanks in advance.
« Last Edit: July 21, 2014, 06:44:20 PM by GrayGhost »

arebelspy

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Re: Florida Real Estate
« Reply #17 on: August 05, 2014, 10:18:12 PM »
Another investor I know is looking into real estate in Florida and was showing me some information on properties there.  Jacksonville seems like a decent market, numbers-wise.
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Mr Mark

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Re: Florida Real Estate
« Reply #18 on: August 05, 2014, 10:42:54 PM »

arebelspy

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Re: Florida Real Estate
« Reply #19 on: August 05, 2014, 10:48:01 PM »
https://www.classzone.com/books/earth_science/terc/content/investigations/esu501/images/esu501_p14_fl_searise_a.gif


beach front + Florida = under 5 ft of water in 50 years?

I'm not too worried about it, for two reasons:

1) I wouldn't be buying beachfront.  Too expensive, not enough ROI, for me personally.
2) The realistic numbers in those pictures don't even look that bad.  The unrealistic ones, sure.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
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sobezen

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Re: Florida Real Estate
« Reply #20 on: September 15, 2014, 11:07:10 AM »
How about land in Port Charlotte?  Does anyone have experience investing or owning in that area?  Thanks!

GrayGhost

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Re: Florida Real Estate
« Reply #21 on: October 16, 2014, 07:23:49 PM »
Right, lads, here's an interesting deal in my area. About $120,000, freshly renovated, I believe rent should be in the ballpark of $1.4k a month. There is a $300/month HOA fee, but that includes insurance fees and outdoor maintanence. Pretty tempting to say the least.

arebelspy

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Re: Florida Real Estate
« Reply #22 on: October 16, 2014, 07:35:34 PM »
Insurance and outdoor maintenance?

It's a condo?
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GrayGhost

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Re: Florida Real Estate
« Reply #23 on: October 22, 2014, 12:50:50 PM »
A townhome, in fact.

Here's another one that I'm pretty interested in, and am hoping to see with a contractor either this weekend or sometime soon. $99k short sale, and it doesn't need much interior work, just stripping of wallpaper and possibly the removal of a poorly placed kitchen wall to create a more open floor design. Outside is poorly maintained, but nothing some sweat equity won't fix. I'm thinking it can be rented out for something lik $1.2-$1.5 a month, depending on the market.

jinga nation

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Re: Florida Real Estate
« Reply #24 on: October 22, 2014, 02:20:42 PM »
Note to ARS and other mods: feel free to break this post off into another thread if you think it's appropriate. I will not be offended. :)

So I have recently found out that I will be working on a space program at Cape Canaveral, Florida, starting sometime in October. While I am quite excited about my job, not to mention living in Florida (no more shoveling snow for this chico), another object of my interest is, as you might guess, real estate opportunities in the Cape Canaveral, Florida area.

Upsides:
GREAT job market. There's a huge military/space program presence there, and that isn't subject to change
Gorgeous location. This brings in a lot of retirees, tourists, vacation home owners, et cetera

Downsides:
Insurance costs. I can only assume that owing to the risk of hurricane and other storm damage, insurance costs will be quite considerable in Florida, especially right on the coast.

After a consideration of the facts at hand, I believe that my interests are best served by engaging in a slow flip. Essentially what I would like to do is to buy a foreclosure or fixer-upper-lite with a friend or coworker, and fix it up while living in it for two or so years. We would then sell it for a profit and head on to our next assignments and such.

I believe this is a wiser course of action because I don't have anywhere close to the money needed to buy multiple properties, so I can't take advantage of economies of scale.  Plus, if I wanted to rent out a property from multiple states away, I would certainly have to get a property manager. I would much rather take a lump payment of a few tens of thousands of dollars and wash my hands of the affair. I also don't have the money to finance a traditional flip, which is why I would have to search for a property that is in liveable condition--it needs to be kosher as far as lending institutions are concerned.

I guess my questions are as follow:
Is my thinking sound?
What pitfalls do you see in my plan? (The obvious one is finding the right guy/guys to enter the deal with, if I am not able to do that, I guess I'll have to contract work that I can't do alone out)
Does it make sense to sell rather than hold if I only have one property (particularly if it's jointly owned) and I am halfway across the country?
Do you know anything about buying foreclosures and REOs/short sales in Florida?
Are there any concerns that apply in particular to Florida properties?
How should I look for deals in such an area? Currently, my plan is to find and hit up real estate agencies that seem to know about foreclosures and let them do the searching and scouring for me, while I simply look at the numbers: cost of purchase, cost to repair, after repair value, et cetera.
Since I intend to do a slow flip, how should my adherence to the 70% rule change, if at all?

All feedback is greatly appreciated, thanks in advance.

The job market on the space coast went down considerably when the Space Shuttle programs came to an end. Jobs are coming back slowly with private space companies and NASA getting in on the new spacecraft. And then there were layoffs and shutdowns at Motorola, Intersil, General Dynamics, etc. I know during that time there were tons of homes on foreclosure/short sale. I haven't looked in 12+ months.

Insurance will always seem high to those moving here from the north. Lots of smaller insurers now so you can get competitive quotes.

Slow flip is a good idea if you don't want to be a distant landlord. Or you could find a good property manager to rent it out based on location.

Don't rely on realtors to find you good deals. They'll just set a query and mail you listings. I've found my deals from MLS and from wholesalers. I have purchased 5 REO/SS units for myself and 2 for in-laws in Tampa Bay. However, make sure you have a good realtor who is not pushy and knows the area and neighborhoods; it helps if they can gauge the potential in a property.

Do your due diligence, check HOA/condo rules and financials, ask questions. Do they allow short/long-term rentals? If you have any doubts, just ask questions, no matter how stupid they may seem.

Check if the area has sinkhole and soil structure issues. Some counties have a lot.

GrayGhost

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Re: Florida Real Estate
« Reply #25 on: October 25, 2014, 08:14:08 PM »
The 99k one got snapped up just before I was going to see it. Sigh.

On the other hand, I'm looking at a pretty decent place a couple of blocks from where I live. I can't tell too much from the pictures, but it looks like the carpet needs steaming. It's a townhome with a small HOA, which I figure covers a lot of my insurance costs, not to mention landscaping and general upkeep.

I'm going to try to check it out pronto. Right now, getting financing together is my priority. I have about $10k in cash right now, but closing costs+taxes+??? mean that I don't have much at all to go into a downpayment. Since I won't be occupying this property, what can I expect financing to be like? Can I get owner occupied financing, live in the place for a few days/weeks, and then start to rent it out?

GrayGhost

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Re: Florida Real Estate
« Reply #26 on: October 27, 2014, 05:58:00 PM »
Welp, the townhome got bought up too. At least I'm on the right track. (At least, I think I am.)

Looking into two more houses. Both should sell for around $110k-$120k. One's a townhouse with a shockingly expensive HOA fee, but given that the HOA covers cable, pool and other maintenance, and most insurance costs, I'm leaning slightly towards it.

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Re: Florida Real Estate
« Reply #27 on: November 13, 2014, 09:08:57 PM »
Another investor I know is looking into real estate in Florida and was showing me some information on properties there.  Jacksonville seems like a decent market, numbers-wise.

It is indeed. Depending on which direction you'd like to go with an investment property, Jacksonville offers old neighborhoods undergoing revitalization at bargain basement prices for historic fixer-uppers and improving vacancy rates. ROI in those cases go north of 15% especially if you can split them into two living spaces. Outside of that, the expanding suburbs offer a different, and yet still good, ROI closer to the 6 to 9% range.

My wife and I are closing on our first rental property of the latter variety later this month and have renters slated to move in early December.

If I was a little more risky and wasn't working full-time, I would buy a couple homes.

GrayGhost

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Re: Florida Real Estate
« Reply #28 on: November 14, 2014, 03:04:35 PM »
Isn't it a royal pain in the rear end to get an SFH converted into a duplex? Wouldn't you have to get it rezoned or something like that? Not to mention, you'd have to supervise the contractors who separate the house into two units. That doesn't sound easy to do from afar.

Knapptyme

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Re: Florida Real Estate
« Reply #29 on: November 17, 2014, 09:43:39 PM »
Isn't it a royal pain in the rear end to get an SFH converted into a duplex? Wouldn't you have to get it rezoned or something like that? Not to mention, you'd have to supervise the contractors who separate the house into two units. That doesn't sound easy to do from afar.

I don't know all the details to doing it, but I have acquaintances that have either found the right home where it's already been done or it was a big enough home to have a separate servants' entrance which leads to to separate living quarters. Yeah, probably not something you'd want to mess with from afar.

GrayGhost

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Re: Florida Real Estate
« Reply #30 on: January 09, 2015, 10:57:28 PM »
Looks like I'm finally making progress. Negotiations on a small multifam are coming through. Rent is $2,110 a month and we're going to close around $120,000.

And two units are vacant. When they are filled, rent will be upwards of $3,500 a month, which makes me hit not only the 2% rule, but the fabled 3% rule.

I'm looking to do an inspection at the end of the coming week. Closing should be in mid-February. I'm currently waiting on some documentation of money coming in and going out, but looks like a formal offer will be submitted within just a few days.

greaper007

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Re: Florida Real Estate
« Reply #31 on: January 10, 2015, 02:41:04 AM »
Beachfront condos can get expensive.   My dad lived on the beach just north of Melbourne for 10 years.   He would regularly get assessments of a thousand to ten thousand dollars for things like a new roof.    It's a beautiful place to live, but salt water destroys everything.

Keep that in mind if the numbers are tight.

LiveLean

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Re: Florida Real Estate
« Reply #32 on: January 10, 2015, 02:59:10 PM »
Danger Will Robinson...

Whenever I hear about someone frothing over FL real estate, it's usually someone who does not live in FL. (I've lived here since 1997).

Two things to consider: very high property taxes and absurdly high homeowners insurance. This cancels out a lot of what might seem like a good deal by other metrics.

The only reason the taxes and insurance make sense is if you live in FL and, thus, save by not having to pay state income tax and, generally, a lower cost of living than other states. This is why everyone from Tony Robbins to Rush Limbaugh to a disproportionate share of pro athletes live here.

Plus, if FL is your permanent residence, you can homestead your main residence and minimize the increase in property tax. For instance, the property tax on my home has risen from $5,200 to just $6,300 in 15 years. Without the homestead exemption -- i.e. if I didn't live in FL -- would be $10K/annually -- actually higher than that from 2005-2008 before the market tanked. And Florida real estate, by the way, has not recovered nearly as much as in other parts of the country -- thus, the interest on this board.

After the four hurricanes of 2004 - none of which came within 100 miles of where I live, an area that hasn't been struck by a hurricane in 100 years -- my homeowners insurance went from $1,100/year to as high as $5,000 a year, though thankfully has settled in at "only" $3,250/annually but still steep and requires re-shopping annually.

I own a second home/rental property in VA and it's a much better value on any number of fronts. I'm working on convincing wife to sell primary residence here in FL and rent much smaller place nearby as our primary home. We'd save the two biggest burdens of living in FL --- property taxes and insurance -- while maintaining FL residency and enjoying no state income -- and, of course, our awesome weather.

Of course, if you're in position to move to FL, I'd highly recommend it. Life is too short to deal with cold weather inconveniences!