So you've come to Florida for a vacation, and somewhere between the surf, the sky and the sand you've decided you want to stay ? at least for part of the year. All dreaming aside, there are many practical reasons to purchase a second home: you may be looking for a rental income, a way to diversify for investments, a personal retreat or a familiar vacation spot.



With the year-round sunshine and stunning views, it's no shock that Florida is such a popular spot to call home. It may surprise you to know, however, that we're in a buyer's market, which means you have more options. Home sales have dropped considerably since last year and the available inventory keeps growing. This is too bad for the speculator, but it's great news for buyers. You can relax, take your time and watch prices: there may be more room for negotiation. If you want to flip a property, it won't be as easy, but if you're buying for investment then you know that the market goes up and down. Get in now and the value will increase.

The first thing to do is get your finances in order. If you have equity built in your home you may be able to borrow money against it to pay the down payment on a second home, but it's important to consider monetary issues aside from simple financing. Will you be renting your second home when you aren't there? You may want to talk to an accountant - depending on how much time you stay in your second home and how often it is rented out your taxes and deductions will differ. Ask yourself if you can afford the property taxes and remember that you may have to pay capital gains tax if you sell the property down the line. Think about the annual cost of upkeep: calculate the utilities, association fees, garbage collection costs, etc. Also, make sure you qualify for the insurance you need.

If you are thinking of renting your second home you should check with property management companies in the area. While they can't predict the future, they should be able to give you a good idea of the local market - how often are properties rented, for how long, and for how much?

Be sure to check the out the neighborhood. This is less important if you are familiar with the area, but if you've come on your first vacation and fallen in love you should take some time to get practical. You wouldn't marry someone after the first date would you? Make sure your neighborhood meets your day-to-day needs. If you're a latte hound you want ensure find a coffee shop within a suitable distance - the last thing you want to do on your next holiday is spend a half hour commuting to the nearest Starbucks. Checking out other necessities, like local health care facilities, is also a good idea, especially if you are thinking of spending your retirement in this location.

With all the practicalities aside, the reality of your permanent vacation spot in the Sunshine State can begin. Once you visit it's hard to leave!