BUYING AN INVESTMENT PROPERTY

So you’ve decided you want a holiday or investment home in Florida – fantastic!

Buying a property in the USA is no more difficult than buying in any other country, it’s just that the process is different. The following pages should help you to pick your way through the various steps necessary to achieve your goal.

Of course, simply finding and buying a home is only half the story. The real fun comes with what happens after the purchase. Most people buy with a view to renting out the property as a vacation home. So in fact, it is not a home that you are considering buying, it’s a business, a small hotel in fact, in Florida.

An estimated 50 million visitors are attracted to Florida every year and the number is growing. So the object of these notes is not just to guide you through the process of buying a property here, it’s also to help you make sure you get your fair share of those 50 million visitors staying in it.   We want you to turn your investment into something you will be proud of - your own piece of the Florida sunshine

How can we help you to find your home?

Because we are fully licensed Realtors, and have been operating in this market for many years, we have the knowledge and experience to make the house-buying process as smooth as possible for you. We specialise in the investment property market and almost 100% of our clients are UK residents looking to buy a holiday home in Florida. But where do you start?

Location, Location, Location

It is important to remember that if you are planning to use this property as an investment home and offer it as a rental; you need to be clear on the following:

Location is the key – your rental clients will want to get to Disney and all the other Orlando-based  attractions, golf courses, shopping areas and, of course, the Airport as quickly as possible. It also has to offer them the “WOW” factor, which we’ll cover later.

If your property meets these needs, they will come back year after year and will recommend the property to their friends. This is as good as money in the bank.

Of course, if the purpose of your home is not investment, and you just want a place in the sun where you can come and relax, then choosing the location can be more flexible.

Florida is often described as the state of the newly wed and almost dead. Many visitors come here for their weddings, honeymoons and eventually, retirement. Many Americans and Canadians and more recently Europeans come to Florida to spend their winters away from the cold. The Canadians are often referred to as the “Snowbirds”.

The amount of new-home building in Florida exceeds that of any other US state. Currently the only thing holding back new building work is the supply of water. There are no reservoirs in Florida, despite the high level of rainfall. Water companies simply cannot build the “plumbing infrastructure” fast enough to meet the demand of the builders. The demand for new properties here is largely fuelled by the British buyers who seem to arrive here daily in their hundreds, looking for their dream home. Since early 2004, this has had the effect of pushing new home prices up on an almost monthly basis and of course, in turn this increases the cost of re-sale homes.

Properties that have been owned previously are referred to as “re-sales”. Both new and re-sale homes make for an excellent capital investment.

There has never been a better time to buy!

Currently, the number of both new and re-sale homes for sale has hit an all time high, which, after a period when values were dropping, has finally stabilised prices. Builders are now offering fantastic incentives for those wanting to buy their over-stocked sites. Equally, there are dozens of re-sale bargains to suit every budget.

So can a foreign buyer buy any type of property here? Basically they can, but most are looking for a property that is zoned for vacation use. All properties here are “zoned” – which means that in some zones, renting is not permitted whereas in others it may be.

Short term and long-term rentals

There are two types of rental properties, short-term and long-term. Long-term is described as any rental agreement over six months ( often referred to as “six months and a day” ). Holiday rentals whilst typically two weeks duration, are normally for a maximum of four weeks, although you may get, for example, retired people coming from over from the UK for three, or even six months at a time and looking to rent a home in the sun and escape the British winter.

To accommodate rental guests on this basis, you will need a license. Existing, short-term rental properties are usually already licensed, so for example, a three-bedroomed villa with a sofa bed in the lounge will typically be licensed for 8 guests and a four bed for ten, and so on.   Even so, you will need the license to be transferred into your name. Your property management company will assist with this – more on that later.

Many areas are deemed "residential" only, and therefore can't be used for short-term rentals ( i.e., holiday homes ) but could still be used for long-term, as many Florida residents prefer renting to buying. On the other hand, if you have a short-term rental property and someone wants to rent it for a year, there is no problem, except that you can’t use your Florida home yourself during the rental period. Usually a discount is arranged for a long-term agreement.

As part of our “filtering” process, we would not normally recommend any properties outside the short-term rental zones, unless you specifically asked for it. One of the reasons for this is that when you come to sell the property, you need to be able to market it to the most number of potential buyers. In other words, don’t restrict yourself.

This next question you may wish to ask is whether you should be looking at new or re-sale homes.

Related Page:

New versus Re-sale