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For Investors: Investments that Bear Fruit

Buying an investment home or a vacation home is an important decision. Here are answers to the most common "Frequently Asked Questions" of second home buyers that are considering the Orlando area and Central Florida.

Question: What is the difference between a Mortgage Banker and a Mortgage Broker?

The main difference between a Mortgage Banker and a Mortgage Broker is that Mortgage Bankers lend their own money and Mortgage Brokers do not. It has been our experience that Mortgage Bankers are more reliable with respect to 1) delivering funds according to those terms, especially the interest rate, anticipated by the buyer, 2) delivering funds at closing, and 3) delivering funds on time.

Question: What is the difference between Short Term Rental and Long Term Rental zoning?

Answer: Short Term Rental zoning allows for rentals to take place on a short term basis, such as a week or a month, most commonly to out-of-state and foreign vacationers. This zoning is found typically near the theme parks, in some parts of Osceola, Polk, and Lake Counties. Some coastal counties also permit short term rentals. Short term rental zoning is generally not found in Orange and Seminole Counties. In Orange and Seminole Counties, long term rentals, typically for 12 month periods, are permitted.

Question: Can someone manage my investment home for me?

Answer: Yes. There are property management companies throughout Central Florida that specialize in either short term or long term rentals. Some vacation home communities have an on-site property management company that an owner may choose to manage their home. Property management companies typically charge a percentage of the rental income for their services.

Question: Is financing available for second home buyers?

Answer: Financing is available for qualified second home buyers. Most lenders will require a 10% to 35% down payment for a second home purchase. Interest rates for second home purchases are typically very similar to rates for primary home purchases. Most reputable lenders will provide a free estimate of monthly payment costs and closing costs to prospective second home buyers. We will be glad to recommend a lender to you if you desire more information.

Question: What are the typical property taxes in Central Florida?

Answer: Property taxes can vary depending upon the county and city but most total millage rates are between 14 and 21 ($14 to $21 dollars per $1,000 dollars of assessed value, per year). In practical terms, most home owners will pay between $1,400 and $2,100 per year for every $100,000 of assessed value. Please note that it is the County Assessor or Appraiser that determimes the assessed value. Some amenity-rich communities may also have a Community Development District (C.D.D.) and an associated assessment that is paid on an annual basis.