Buying Property In Florida

There is big growth in the number of British people buying homes in Florida. If buying to let, properties must have access to top quality golf courses and swimming pools to attract high rentals, as well as capital appreciation. Lock up and leave resort style developments are popular, backed by high US standards of amenities and rental service. Every day over 1000 people relocate to Florida. Not just the retired, but affluent young professionals. 18,000 Britons expected to buy second homes in the US this year, primarily in Florida, a rise of 50 percent from 2003.

Over 58 million visitors flock to Florida every year, bringing over $50 billion to the state’s economy. The sun, sand, sea and theme parks mean there is a healthy rental market. Over 47 million people a year, a 10th from the UK, visit the Orlando area and the big theme parks such as Disney. There are more than 12,000 vacation homes in the areas close to Disney. Demand falls rapidly if you are further than 20 minutes from the prime locations.

When Disney arrived in 1971, few had any idea of how Central Florida would be transformed. Around $600 million was invested initially and on one day traffic stretched back 40 miles out of Orlando. Swamps became homes and citrus farmers became rich as the scramble for land began.

Maximise your letting potential by buying a brand new four bedroom property with a pool, air-conditioning etc, within 15 minutes drive of Disney World. Make sure the zoning regulations for your area allows short-term lets. Different local laws may affect how long you can rent out your holiday home for.

Favourable exchange rate: The dollar has fallen over the past year from around $1.60 to nearly $1.90 to the pound. Florida property prices are rising, but the weak dollar means in real terms they are falling for the British purchaser. A $140,000 three bedroom villa in Central Florida would have cost around £88,000 in sterling last year. Now it will cost under £75,000. Florida does anything from $90,000 to $10 million, if you are in the Tom Cruise, Nicole Kidman buying bracket in Naples for example.

You can buy a four bedroom villa five minutes from Disney for £130,000. With prices rising at least 10 percent a year, or even higher in some areas. The closer you are to amenities, airports, golf courses and beaches, the more you can make from rental and therefore more you pay to buy.

Base your rental income on 30-35 week season. Rental income must be declared in the US and the UK, but double tax agreements ensure the income tax paid in the US is deducted from any UK tax liability. There is no state income tax in Florida.

Tightening of immigration procedures: The British currently can enter US for 90 days at a time without a visa. This could change to having to apply for a visa in person.

Most real estate agents represent the seller, not the buyer. Safeguard your interests by arranging an exclusive agent agreement where the agent acts for the buyer.

There is a consumer friendly Multiple Listing Service with access to all listed properties for sale in the area, regardless of agent.

You can set up your mortgage in dollars or sterling. Sterling better if buying for own use. But if for investment and rental, a dollar mortgage will allow you to match income to expenses in a single currency.

Maximum Mortgage Loan: As a non-national in Florida is 80 percent. Currency used to buy the property should, as rule of thumb, be the same as the currency the asset is valued in.

Total Buying Costs: Including legal, taxes, stamp duty, insurance etc between three and six percent of price of property. Costs include property tax of 1.5 - 2 percent per annum of appraised value of your home.

Appoint your own lawyer: You need to decide who the best owner for tax purposes is. Minimise tax liabilities by taking expert advice. Inheritance tax can be very high. You need to check the title of the property and that there are no debts attached to it.

In a boom market, there is pressure to sign a reservation contract or risk losing the property. Still take legal advice before signing, however tempting. The deposit on pre-construction of a new build property can be between 10-30 percent, with the balance paid on completion of the property. You can, if checks on the property prove unsatisfactory, pull out of the contract without penalty. But again get the small print checked.

Living in Florida as a non-resident you will have to pay local property taxes and any state income tax deriving from US activities, such as rental income.

General Information

Education
There are probably more myths on the American education front than on any other issue, apart from crime. As an example, few people in Britain realize 20% of grading in Florida High Schools is for employability (good behaviour). The Florida Lottery covers college tuition costs at State Universities in many cases.

Driving & Public Transport
Having a car in Florida is very useful as public transport in vertically non-existent. Although there are buses in the Disney World complex, elsewhere is very limited. Car Insurance can be hard to obtain at a reasonable rate in your first year, but you will need it in place before you are able to drive away that all too necessary car. Again, it is worth making contact prior to your move for advice on those elusive insurance policies. For example, the incorrect explanation of the British, automatic penalty point system for speeding, to an American insurance agent can significantly increase premiums.

Employment
Many British people have been extremely successful in operating businesses in America; that is having done a lot better than had been the case in Britain and have truly discovered the land of opportunity. On the flip side, there are some who have found things very different and lost a lot of money. All too often you are not given all the essential facts of a business, as it is taken for granted that you have the same knowledge as an American buyer would have. It is imperative to find a good business broker. For permanent residence & employment a green card must also be attained.

Health Care
It is imperative that you have health insurance coverage from the second you enter the USA. If you are being sponsored by your company and have a copy of the policy, fine. If not, you are advised to obtain coverage. Do not depend on your British holiday coverage, as it will not be valid. Eventually you will qualify for American insurance companies. Some will be able to obtain immediate coverage. If not, there are a number of excellent other policies, that have found clients very satisfied with. Beware of certain policies that do NOT provide coverage in the strict sense, but are actually a medical discount scheme. This is not always evident. In the event of a medical claim running into thousands of dollars, a 10% discount obviously does not cover the other 90% of the bill.

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Andrew Bartlett established and headed specialist British groups for two of Florida’s largest real estate Companies which have advised thousands of Britons relocating and/or buying property in Florida.

He writes articles on Florida lifestyles, property trends for ‘Emigrate America’, ‘Place in the Sun’, ‘Red guide to buying a property in Florida’, ‘Florida Magazine’ and ‘The Sunday Times’, and a specialist advice column on problems that have occurred when Brits are misled into buying in the wrong locations or badly advised in their property choice.

 

For further information on how to obtain specialist advice on relocating or buying property in Florida, the advantages and disadvantages of different locations, and importantly How to obtain details of  specialised fully licensed Real Estate Agents, experienced in explaining options from a British perspective. Click here