The Real Cost of Florida Home Ownership

Homeowners Insurance

Homeowners insurance, as the name implies, is simply an insurance policy on your single family home which reimburses you for unexpected losses due to perils such as theft, fire, hail, a tornado or a hurricane. Floods and earthquakes are typically not covered under homeowner policies and would be purchased as separate policies. As Florida has experienced several strong hurricanes in recent years including Milton (2024), Helene (2024), Idalia (2023) and Ian (2022), homeowner insurance rates have been rising considerably due to record insured losses as well as the now higher replacement cost of real estate structures, materials and labor, caused by inflation. In 2024, the cost of a typical homeowner insurance policy, for a single family Florida home valued at $550K, would be roughly $3K - $4K per year. Homeowners insurance policies are required by all lenders.

Flood Insurance

As Florida is home to many barrier islands and coastal communities, the Intracoastal waterway and miles of boating canals, having flood insurance may be additionally required by your lender if you’re in an area that is prone to storm surge when the unexpected tropical storm or hurricane arises. Flood insurance typically covers your home’s structure and foundation, HVAC and electrical systems as well as your personal contents. Flood insurance typically costs around $700 - $900 per year.

HOA Fees

Homeowners association fees, also called HOA fees, are expenses levied on property owners for the upkeep and maintenance of common areas such as a community center, clubhouse, swimming pool, parking areas, community landscape and lighting, community signage and entrance gates, insurance of real estate structures as well as cable TV and/or Internet service. While HOA fees are more commonly associated with multi-family dwellings such as condos and townhomes, many single family home communities also have an HOA fee, but typically of a lesser dollar amount as homeowners are usually responsible for their own home insurance policy. As insurance rates have risen substantially in recent years, so have the HOA fees. In 2024, typical HOA fees for Florida condos and townhomes are roughly $400 - $600 per month.

CDD Fees

Many newer, large-scale master-planned communities in Florida have a Community District Development (CDD) fee. A CDD fee is simply a fee which transfers the financial cost of building out the infrastructure and amenities of a community, and the on-going maintenance thereof, from the developer, to the homeowners. This is achieved by setting up a special municipal bond, typically between 20 and 30 years, where residents within a CDD community are then levied this CDD fee annually through their property tax bill. It’s important to note that some communities may have both an HOA fee and a CDD fee. When this occurs, the HOA fee covers the maintenance and upkeep of the individual units and home sites whereas the CDD fee covers the upkeep and maintenance of the community infrastructure and community amenities. In 2024, typical CDD fees for Florida homeowners range from $200 - $300 per month.

Real Estate Property Taxes

Owning real estate in Florida means that you will have to pay property taxes each year. Property taxes help to fund local infrastructure, county schools, emergency medical services, trash collection services and more. If your Florida home purchase will serve as your primary residence, you will additionally be able to file for a homestead exemption, which reduces your property’s taxable value up to $50,000 and also limits your property assessment increase each year to no more than 3%. As a very general ballpark for calculating property taxes on your Florida home purchase, a good estimate would be 1% of the purchase price. As an example, for a home purchased at $400K, a ballpark estimate for property taxes would be $4K/year, or $333/mo.

Pool Maintenance

Many Florida homes come with a swimming pool which means routine maintenance to keep the pool filters and traps clean, water levels chemically balanced as well as vacuuming and brushing down the pool shell and tiles. While many homeowners may choose to maintain their own pool, hiring a professional pool cleaning service would cost roughly $80 - $120 per month.

Lawn Care

When it rains in Florida, everything grows, especially during the rainy season which spans mid-May through mid-October. This means regular grass-cuttings, edging, shrub-and-palm-tree trimming, mulching as well as the clearing and removal of yard debris. As Florida’s summer months experience daily temps in the mid 90’s, combined with high humidity, many homeowners choose to hire a professional landscape company which can cost roughly $80 - $120 per month. For those who prefer to live in a maintenance-free community, where lawn care and landscape services are provided (per unit or per home site), this expense would typically be covered under your HOA fee.

Future Home Maintenance

For anyone who has ever owned a home, they are well-aware of all the on-going maintenance, and expenses, that are associated with keeping a home in good working order. This can be anything from regular HVAC maintenance, power-washing the structure and driveway, interior and exterior painting, new roof, new flooring, plumbing leaks, as well as appliances that unexpectedly break including washers, dryers, kitchen appliances or your hot water heater. Planning ahead and setting aside funds each month for these unexpected expenses is a always good way to prepare for them.

Hurricane Protection

As Florida has received 40% of all hurricanes ever making landfall in the U.S, adding hurricane protection to your home may be a sound investment, especially for older homes. This may include items such as hurricane shutters, hurricane window film and/or impact resistant windows, which is yet another expense outside of your home purchase. Since 1992, when hurricane Andrew made landfall in southeast Florida, building codes have become much more stringent making homes significantly more resistant against powerful hurricanes. As an example, the following is a short video clip where Babcock Ranch, a top-selling master-planned community in SW Florida was featured on 60 Minutes after taking a direct hit from Hurricane Ian in 2022, a Category 4 storm with 150+ mph winds. The community never lost electricity and was practically unscathed by the powerful winds due to more modern and stringent building codes. Watch video.