Yahoo Finance I’m a Real Estate Agent in Florida: Here’s What Retirees Must Know Before Moving Here
When you’re trying to determine where to spend your golden years, you will likely consider all options to maximize your standard of living. One of the most common retirement destinations is the state of Florida.
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However, before you list your home and start packing your stuff to head toward the Sunshine State, there are several factors to consider.
GOBankingRates asked two Florida-based real estate agents to name some things retirees must know before moving to Florida.
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Some Areas Are Much More Affordable Than Others
Florida is a pretty big state, and your cost of living will depend heavily on which location you choose.
“As a retiree moving to Florida, you’ll be quite pleased to discover that some of your expenses will be lower than other areas of the country,” said Aja McClanahan, a financial writer and real estate agent from Space Coast Move HQ. “In some parts of the state, you can still find incredibly affordable housing and an overall lower cost of living.”
Larry Mastropieri, a real estate broker and owner of FloridaHomesBocaRaton.com, agreed that location makes a big difference in Florida.
“While some places like South Florida and Naples are quite expensive, there are also many affordable areas, especially in the central and northern parts of the state,” Mastropieri said. “Keep in mind that, in recent years, the cost of living has significantly increased throughout Florida.”
It’s crucial that you stay updated with prices so that you don’t base your retirement planning on outdated costs. If you’re on a fixed income, you’ll definitely want to factor in inflation in your calculations.
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Florida Doesn’t Have a State Income Tax
For many retirees, Florida’s lack of a state income tax is nearly as appealing as its abundance of sunshine.
“There’s no state income tax, which can make your dollars stretch a bit further,” McClanahan said. Retirees on a fixed income can benefit tremendously from the lack of a state income tax. This means you won’t have to pay state taxes on Social Security benefits, IRAs, pensions, 401(k)s, and other retirement income sources. Florida also doesn’t have an estate or inheritance tax if you’re looking to preserve wealth for future generations.
When you run your retirement calculations, you must factor in taxes since these will affect how much money you can access from your retirement accounts. The good news is that you can still find lower housing prices and take advantage of the no-state taxes if you sell your current residence to move to Florida.
“It’s important to note that in order to take full advantage of Florida’s tax benefits, you’ll need to establish legal residency, which includes spending a minimum number of days in the state each year,” Mastropieri said.
About Those Rising Costs in Florida…
“One thing you should be aware of is the rising costs of property insurance and, in some areas, property taxes,” McClanahan said.
While many retirees have flocked to Florida for the lower prices, some costs have risen in recent times. For example, the state has made headlines for its sky-high home insurance rates, which can be up to four times the national average in some areas.
“The state’s property taxes are about average compared to the rest of the US, but insurance costs, especially for homeowners’ insurance, can be high due to the risk of hurricanes, flooding and fraud,” Mastropieri said. “Florida is in the middle of an insurance crisis that has caused insurance premiums to triple since 2019.”
McClanahan suggested retirees may be able to keep costs down if they bundle their insurance coverage or opt for a mobile home or condo instead of a single-family home.
Pay Attention to Real Estate Prices
“Florida is a mixed bag of prices,” McClanahan said. “Where I’m licensed (The Space Coast), a few cities make top affordable places lists, like Melbourne, Palm Bay, and Titusville.”
Mastropieri said those with a more limited budget may want to look to the northern parts of the state.
“In general, Florida’s northern and central regions tend to offer more affordable housing options than the southern part of the state, with some variations,” Mastropieri said. “Cities like Miami in South Florida attract a dense population due to their appealing climate, which is noticeably warmer than in North Florida. Furthermore, South Florida faces certain geographical constraints, such as limited land availability for development, partly due to the presence of the Everglades National Park.”
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“As a general rule of thumb, you can find extremely affordable housing if you are willing to go inland, even just a little,” said McClanahan. “If you have to have a waterfront place, you can still get a reasonably priced property off of Florida’s many lakes, rivers, and canals. For instance, a few months ago, I showed a couple a newly renovated 3/2 in Okeechobee off a finger canal for around $300,000.”
There are plenty of options for those seeking a balance between affordability and high quality of life, Mastropieri said.
“Determining the ideal standard of living in Florida is highly subjective and hinges on various personal factors, with the cost of living often playing a crucial role in this decision-making process,” according to Mastropieri. “Due to its relatively high cost of living, South Florida is not commonly ranked at the top for those seeking an optimal balance of affordability and quality of life. Cities like Sarasota, Naples, Orlando, and Pensacola, however, stand out as appealing options.”
Mastropieri said places like Naples and Pensacola offer a more affordable cost of living while still having employment opportunities for those who want to keep busy.
Closing Thoughts
When deciding where to move for your golden years, it’s critical that you work with a certified professional to ensure that your finances make sense. You’ll want to look at real estate prices in Florida to see what you can afford based on your situation.
“The housing market in Florida can be very dynamic, with prices varying significantly from one region to another,” Mastropieri said. “Coastal areas like South Florida are very expensive as compared to some inland areas. For example, many people are moving out of South Florida because the cost of home ownership and renting is so high.”
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This article originally appeared on GOBankingRates.com: I’m a Real Estate Agent in Florida: Here’s What Retirees Must Know Before Moving Here
