Florida Home Buyers need to think more about Insurance when purchasing a home
Let's face it. When it comes to the home buying process setting up the insurance is one of the least exciting parts. However, it's something that is required to be there so putting yourself in the best position to deal with it is key. In Florida, we may not deal with state income taxes, but we deal with obnoxious Home Insurance rates. It's such an important part of the process that there are literally homeowners paying more in Insurance than they are on their mortgage each year. Combine that with variable mortgage interest rates and you have a volcanic eruption waiting to erupt.
So how can you best prepare for this? First off, the house itself. If you're going with an older home you need to make sure you know the age of the current roof, water heater, etc. A lot of folks end up buying older homes at inflated prices that require 10's of thousands of dollars in renovation. Factor this over 20 years with what you're going to pay in insurance/taxes and you could easily accumulate an additional 100K on top of your mortgage and the interest. Think about that for a second.
I always recommend building rather than buying however that's not particularly easy right now when lots are going for almost 100K. At a certain point, this real estate market is going to pop and it's going to be due to issues such as this. So what are the two most cost-effective upgrades a homeowner can give themselves? Your roof and windows. These can make a difference in your premium by thousands of dollars every single year. I would avoid any home with a ten year or older roof.
Also, a lot of properties in crime-ridden areas are being listed at high prices due to the market., Avoid these properties. Not just for your own safety, but also because you'll be living in a bad zone for crime which will increase your rates due to the threat of vandalism or theft. I realize upon writing this that it's not easy finding an affordable home in today's market with upgrades throughout the home including the roof. Upgraded bathrooms and dining rooms are nice, but you will quickly lose the 20 thousand or so you gained by doing the renovations by ignoring upgrades that are absolutely needed for the home (Water Heater, Roof, Air Conditioning)
These aren't the most exciting topics when it comes to owning a home but addressing these issues will save you thousands in home equity.