First House Hack in Edgewater – Need Local Advice
Hi everyone,
I’d love to get some input from more experienced investors who know the Florida market (especially Volusia County / Edgewater area).
We’re under contract on a single-family home with a separate studio apartment that we plan to live in as our primary while renting out the studio for extra income. It’s our first purchase, so we’re still learning the ropes. The property was recently flipped (built in 1977), and while it looks nice cosmetically, we’re waiting on inspection and permit info to confirm what was actually updated.
Major updates already done:
Roof replaced in 2021
Solar panels on roof in 2024
HVAC 1–2 years old
Water heater 4 years old
Vinyl fence 2 years old
Our challenges so far: Insurance is insanely expensive, cheapest quote we’ve seen is $3,700/year, and that doesn’t even include the landlord endorsement. We’re still digging into permits and want to make sure the flip was done right.
Our main goal: We want to finally get out of renting, start building equity, and learn how to manage a rental. Long-term, we’d like to get serious about real estate investing, but this is our first step and we have to start somewhere.
Questions for those familiar with this area:
How is rental demand for small studios/in-law suites in Edgewater?
Are there any local hidden risks we should watch out for (insurance, taxes, tenant laws, etc.)?
For a first-time house hack, would you run the rental side through an LLC, or keep it simple for now?
Anyone here bought flips in this market, what hidden issues came up for you?
We’d really appreciate any local insight or lessons learned 🙏
Most Popular Reply
Feedback on Your Edgewater House Hack Investment
Congratulations on taking the first step into real estate investing with a house hack strategy! This is one of the smartest ways to start building wealth while learning property management with reduced risk since you'll be living on-site. However, there are several important concerns and opportunities specific to your Edgewater/Volusia County situation that you need to address carefully.
Insurance and Risk Management: Your $3,700/year quote is unfortunately typical for Florida's current insurance crisis, but it's still concerningly high and will significantly impact your cash flow. Shop aggressively with multiple independent agents who specialize in Florida properties, not just online quotes, and specifically ask about Citizens Property Insurance (Florida's insurer of last resort) if private market options are prohibitive. The solar panels may actually increase your insurance costs or create coverage gaps since they add roof penetrations and expensive equipment—verify your policy explicitly covers solar panel damage, removal/reinstallation after roof repairs, and inverter replacement. Request the landlord policy endorsement quotes in writing now before closing, as this could add another $500-1,000 annually and dramatically affect your numbers. Factor in that Florida insurance rates are likely to continue rising 15-20% annually for the next few years.
Flipped Property Red Flags: Since this is a 1977 home that was flipped, you need an extremely thorough inspection focusing on what wasn't updated, not just what looks pretty. Specifically verify: plumbing (polybutylene pipes were common in 1970s Florida homes and are insurance nightmares), electrical panel and wiring (aluminum wiring, undersized panels, or Federal Pacific panels are common flip shortcuts), foundation and slab (Florida soil settlement issues), windows and doors (proper hurricane ratings and permits), and drainage/grading around the property (Florida flooding is serious). Pull every permit filed for the flip from Volusia County's building department before your inspection period ends—if major work was done without permits, walk away or demand the seller obtain them retroactively, as unpermitted work can kill your resale value and create liability. Ask your inspector to specifically look for cosmetic coverups: fresh paint over mold, new flooring over structural issues, or updated fixtures hiding outdated systems.
Studio Rental Market Reality: Edgewater has moderate rental demand due to its proximity to New Smyrna Beach and affordability compared to beachfront areas, but small studio rentals can be challenging. Your realistic monthly rent for a studio apartment is likely $800-1,200 depending on size, finishes, and separate entrance quality—research actual comps on Zillow, Apartments.com, and Facebook Marketplace for Edgewater studios specifically, not just what you hope to get. Verify the studio is legally permitted as a separate dwelling unit with its own address, kitchen, bathroom, and separate utilities/entrance—many "studio apartments" in Florida are unpermitted conversions that violate zoning and could result in fines or forced removal. Check Edgewater's zoning code to confirm accessory dwelling units (ADUs) or duplexes are allowed in your specific zone, as some single-family residential zones prohibit separate rentals even if the structure exists. Consider that having a tenant 20 feet from your bedroom could be challenging for your quality of life—screen tenants extremely carefully and establish clear boundaries from day one.
LLC and Legal Structure: For your first house hack where you're living on-site, keep it simple and do NOT set up an LLC initially (CHECK YOUR LEGAL REPRESENTATIVE, AS THIS IS NOT LEGAL ADVICE). You'll lose your primary residence homestead exemption (which caps property tax increases in Florida), likely pay higher mortgage interest rates or struggle to get financing (owner-occupied mortgages require you personally to own and occupy), and create unnecessary complexity for minimal liability protection when you're living there anyway. Once you move out and convert it to a full rental, then consider forming an LLC and transferring the property. For now, simply increase your homeowner's insurance liability coverage to $500k-1M and get a $1-2M umbrella policy (costs about $200-400/year), which provides better protection than an LLC for house hacking situations.
Local Volusia County Concerns: Property taxes in Volusia County average 1.1-1.3% of assessed value, and without homestead exemption on the entire property your taxes could be higher than expected—confirm the exact annual tax amount and whether homestead will apply. Florida landlord-tenant law strongly favors tenants with strict notice requirements, security deposit handling rules (must be held in separate account and disclosed), and eviction processes that take 30-60 days minimum—familiarize yourself with Florida Statutes Chapter 83. Flood insurance may be required depending on your flood zone—check FEMA maps for your exact address, as Edgewater has areas near the Indian River and Mosquito Lagoon that flood. Budget for pest control (termites, roaches, mosquitoes) as ongoing Florida expenses—expect $50-100/month. Hurricane preparedness is real—you'll need to have a plan for securing your property and potentially evacuating, which affects both your living situation and tenant management.
Financial Reality Check: Run your numbers conservatively assuming: $3,700 insurance + $500 landlord endorsement, realistic $900/month studio rent with 8% vacancy rate (one month empty per year), 10% of rent for maintenance reserves, property management costs even though you're doing it yourself initially (because your time has value), and property tax increases after homestead caps expire if you move out. If the numbers don't work with these conservative assumptions, reconsider the deal—many first-time investors get emotionally attached to "finally owning" and ignore cash flow reality. Your goal should be that the studio rent covers at least 50% of your total PITI (principal, interest, taxes, insurance) payment, otherwise you're not really house hacking effectively, you're just buying an expensive house with a small side income.
Bottom line: This can be an excellent first investment if you verify permits, get a thorough inspection, confirm legal rental status, and ensure the numbers work with realistic Florida costs. But don't let excitement override due diligence—flipped properties in Florida with sky-high insurance and unpermitted studios can become money pits quickly. Take your time during inspection and don't be afraid to walk away if red flags appear.
DISCLAIMER: This information is for educational purposes only and does not constitute legal, financial, tax, or investment advice. Real estate investing involves significant financial risk and complex legal considerations. You should consult with a licensed real estate attorney, CPA, financial advisor, and insurance professional familiar with Florida law before making any investment decisions. Every property and situation is unique, and what works for one investor may not be appropriate for your circumstances.