Before you purchase a home in Orlando, Florida, it is important to understand three recurring costs that you will be responsible for after closing. By understanding these costs, you will gain a better idea on if you can really afford a property in Orlando, Florida, or not. The costs are:
- Property Taxes: Your realtor should be able to provide you what the property taxes would be on any Orlando home you are thinking about purchasing. When looking at the property taxes, it's important to understand if those would be your final taxes after you purchase your Orlando home or not. For example, if you purchase a piece of land to build a house on, the property tax of the land will be a substantially lower rate than after the house is built. Once the Orlando house is built, the property will be re-assessed, and the property tax can increase anywhere from $700 to $5,000 a year. Because of this, it's important to know these taxes up front.
- Home Owners Association and Assessments: Most neighborhoods in central Florida have a homeowners associations. As part of the process of buying a property, your Orlando REALTOR should provide you with a homeowners association disclosure, which will disclose how much the HOA fees would be in that community. You also need to look at what is included in those fees. For example, does it include the maintenance of the lawn, the water bill, electricity, etc.? If it does not, you will need to factor the items that are not included into your monthly costs. You also need to find out if the homeowners association has any special assessments. Special assessments are fees that are assessed to an entire community for a particular project that may be taking place within the neighborhood. An example of this would be if a beachfront condo needed to build a new wall along the beach. There could also be several one-time fees you might need to pay, so be sure to check with your REALTOR about these.
- Home and Flood Insurance: If you are getting a loan to purchase your home, you are more than likely going to be required to get homeowners insurance. This cost is usually put into an escrow account with the property taxes so you can pay them monthly rather than having to pay them in one lump sum. You will also need to find out if you the Orlando home you are purchasing is in a flood zone. If it is, then you will need flood insurance as well. Flood insurance is not cheap, and if you are required to purchase it, then you should find out immediately how much that cost will be and factor it into your overall expenses.
Those are the three things that you need to be aware of before purchasing a home. Remember: be smart and informed when buying a home!
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