4 Hidden Costs You Can Face When Inheriting a Property in Florida

Inheriting a property in Florida may seem like a financial windfall, but it can come with unexpected expenses that catch many beneficiaries off guard. While you may be gaining an asset, you are also inheriting the financial responsibilities that come with it. Understanding these hidden costs can help you make informed decisions about whether to keep, sell, or rent the inherited home.

In this blog post, we’ll explore four major hidden costs you may face when inheriting a property in Florida and how to prepare for them.

1. Probate Expenses

If the deceased person did not have a living trust or other estate planning tools in place, their property may have to go through probate. Probate is the legal process by which a court validates a will and oversees the distribution of assets to heirs.

What Are the Costs of Probate in Florida?

• Court filing fees – These typically range from $300 to $400.
• Attorney fees – Probate attorneys in Florida may charge either a flat fee or a percentage of the estate’s value. A common rate is 3% of the estate’s value.
• Executor fees – The executor (also called a personal representative) may be entitled to compensation for their services, which can be a percentage of the estate’s value.
• Publication fees – These cover the cost of publishing required legal notices.
• Appraisal fees – If an appraisal is needed to determine the fair market value of the property, this can add to your costs.

The probate process can take several months to over a year, depending on the complexity of the estate. If disputes arise among heirs, costs can increase even further.

How to Minimize Probate Costs:

• Consult an experienced probate attorney to streamline the process and avoid unnecessary fees.
• If possible, check whether the estate qualifies for summary administration, which is a simplified probate process available for smaller estates.

2. Property Taxes

Once you inherit a home, you become responsible for its property taxes. In Florida, property taxes are based on the home’s assessed value, which may increase upon transfer to a new owner.

Factors That Can Increase Property Taxes:

• Loss of the Homestead Exemption – If the previous owner had a homestead exemption and you do not qualify for the same exemption, your property taxes could increase significantly.
• Reassessment of Property Value – Some inherited properties are reassessed at a higher value, leading to increased tax obligations.
• Local Tax Rates – Tax rates vary by county in Florida. Some areas may have higher property tax rates than others.

How to Plan for Property Taxes:

• If taxes become unmanageable, consult a tax professional about potential payment plans or property tax appeals.
• Check with the local property appraiser’s office to determine if you qualify for any exemptions or tax reductions.
• Consider whether renting or selling the property would be a better financial option to offset tax burdens.

3. Maintenance and Repair Costs

Many inherited homes, especially those that were owned by elderly family members, may require significant maintenance and repairs. Deferred maintenance can result in costly fixes, ranging from minor updates to major structural repairs.

Common Repair and Maintenance Costs:

• Roof repairs or replacement ($5,000 – $15,000)
• HVAC system updates ($3,500 – $8,000)
• Plumbing and electrical system upgrades ($2,000 – $10,000+)
• Landscaping and exterior maintenance ($500 – $3,000 annually)
• Pest control and mold remediation ($500 – $5,000+ depending on severity)

If you plan to keep the property, regular maintenance will be an ongoing expense. If you decide to rent the property, you may need to invest in upgrades to meet landlord requirements.

How to Reduce Maintenance Costs:

• If selling, consider selling as-is to avoid repair costs altogether.
• Get a professional home inspection to assess potential repair needs.
• Budget for annual maintenance costs to prevent bigger expenses down the road.

4. Insurance Premiums

Home insurance is a major expense for Florida homeowners, and inherited properties are no exception. In fact, insurance costs can be even higher for older homes or properties in high-risk areas, such as those prone to hurricanes and flooding.

Why Home Insurance Costs May Increase:

• Florida’s high insurance rates – The average Florida home insurance policy is around $4,060 per year, one of the highest in the U.S.
• Windstorm and flood insurance – If the property is located in a flood zone or hurricane-prone area, you may be required to carry additional policies.
• Vacant property insurance – If the home sits unoccupied for an extended period, a standard homeowner’s policy may not cover damages, requiring you to purchase vacant property insurance.

How to Manage Insurance Costs:

• If selling the home quickly, you may avoid the need for long-term insurance coverage.
• Shop around for different home insurance providers to get the best rates.
• Consider bundling policies to reduce overall insurance expenses.

Conclusion: Should You Keep, Rent, or Sell an Inherited Property?

After inheriting a property in Florida, you’ll need to weigh the costs against the potential benefits. Here are some common paths homeowners take:

• Keep the property – Ideal if you can afford ongoing costs and want to maintain the home for personal use.
• Rent it out – Can generate passive income, but comes with landlord responsibilities and additional costs.
• Sell the property – A great option if you want to avoid ongoing expenses and receive a lump sum of cash.