Florida Retirement Real Estate Traps to Avoid

If you are considering Florida Retirement, here’s a real estate “trap” you need to avoid.

A mother and daughter owned and lived in their modest home in an older northern Florida city. The mother passed away recently at 93 years of age.

The daughter, who is in her early 70s and retired, realized that she could not now afford to keep the house. The mother’s social security income was needed to pay the mortgage. With that income stream no longer available, she put the house on the market.

The Result: After 2 years, the house hasn’t had one showing, let alone an offer! Recently, she told a mutual friend that she could only afford to keep the house for two more months.

Do you have a mortgage on your Florida retirement home (or are you planning to have one)? If so, are there any situations that you can visualize where you could lose your home because of it? The daughter in the above story did not know that her mother would die at the same time that one of the worst real estate recessions in U.S. history would be occurring. One could say that she is an innocent victim of the high level misdeeds of the financial industry titans. Collateral damage they call it in the military.

In the author’s opinion, the only valid reason to voluntarily have a mortgage on your FL retirement home is that the interest is tax deductible. When it is added to your real estate taxes, medical expenses, charitable contributions and other miscellaneous deduction, the total may allow you to itemize deductions. If the itemized total is higher than the standard deduction, you will save on your income taxes. Of course, if your total is higher than the standard deduction without the interest expense, then you don’t need the mortgage.