Andrew Bartlett - Published in Recline (My Travel) Magazine - January
The reasons for the popularity of the Sunshine State to the Brits go beyond the Sunshine States sun records and the fact that English of a sort is spoken!– Florida is a great place to invest particularly with the Pounds strength against the Dollar making property a very popular investment. In fact over nine million Americans have indicated in a recent Harris opinion poll that they intend to eventually move to Florida, which means that the demand for property will remain high for the foreseeable future.
However although Florida is searing ahead as a sought after overseas property destination, there are a number of key pitfalls to avoid to prevent yourself becoming burnt, and the critical fact is to realise that the housing market operates very differently from the one you are used to in Britain. If the rules and procedures laid out by the Florida Real Estate Commission are followed then Florida remains one of the most desirable places to invest in.
When buying property in England most house hunters register with all the Estate Agents in their desired location, they usually also search the local newspapers and any web sites. It is commonly recognised that Estate Agent represents the seller of the property and the seller pays the commission. All this searching around is necessary as individual Estate Agents have separate properties listed with them.
The great thing in Florida is that there is no need to trudge round different Agents and search all the newspapers as properties in each area are all listed on a central system called the Multiple Listing System (referred to as the MLS). This inventory of all properties is available to Realtors subscribing to the MLS area board. A Realtor is the term used for a qualified, registered Real Estate Agent, and if they work solely on your behalf they are termed a Buyers Broker. There is no charge payable by you for this service as the arrangement is to split the commission (paid by the seller) between the Sellers Realtor and the Buyers Realtor.
There are several legal advantages in using a Realtor to work on your behalf in the capacity of a Buyers Broker, for example they are legally obliged to divulge all information they have on the buyer’s circumstances to you which clearly may affect your offer. If you do not use a Buyers Broker but instead deal directly with a seller’s agent or developer be aware whatever they say their key legal obligation is to the seller.
Therefore in Florida the first step, before even looking for property is to select and work closely with your Realtor who will show you the best selection of both new and resale properties – there are some great resale bargains!– so how do you find a suitable one? An ideal Realtor should have knowledge of the UK housing market as well as the Florida one so they can competently guide you through the differences.Other important considerations are the need to take careful advice on the currency and mortgage aspects– they are just as important as the location and property aspects to ensure a Florida property matches your requirements. It is vital to seek out advice from a Realtor who will give you the facts as opposed to lull you into buying an unsuitable property with fancy words and false promises learnt during a high pressure sales course – or equally dangerous a Realtor lacking experience of the type of property you are seeking.
To ensure you are obtaining the best investment for your money you need a Realtor with experience of all the potential markets available, not as can happen one focused on a few developments paying the highest level of commission .It is unusual for example for Orlando agents to be aware of rental developments on the Gulf Coast and vise-versa.
Problems can occur with Companies who offer a rental service and focus strongly on their rental interests when they sell you a property, it is beneficial to be offered a choice of more than one company if you wish to rent out your property and again in this instance impartial advice is critical. Also be aware that many American agents have limited knowledge of the differences between the British and American house buying process – this is a critical area, if you are to avoid misunderstandings leading to costly mistakes.
Independent companies who can advise on finding an experienced Realtor for the Florida Real Estate market include Andrew Bartlett & Associates - details below.
Once you have identified an Agent you feel comfortable with you can now start to look at properties and locations. The largest growing group of Brits buying in Florida are those seeking a second home in the sun to escape the dismal British winter. The Gulf Coast areas around Sarasota and Naples are particularly favoured by this group due to average winter temperatures in the 70s, laid back lifestyles, some of the best beaches in the world, and a range of cultural facilities, making for an idyllic winter lifestyle before returning to Britain just as the spring flowers are blooming.
A high percentage of these active retirees are attracted to golf course developments where a 3-bedroom house with a pool currently costs around £200000, which for a slice of a tropical paradise compares very favourably with a second home in any other location in the world.
Then there are those seeking to both invest in a Florida property to rent out whilst making occasional use of it themselves for holidays. Many of those purchasing property for this purpose want to rent their home out for one or two week periods. Unfortunately many areas and developments have zoning restrictions that curb such short-term holiday lets, its vital that you are fully advised by your Realtor about possible rental restrictions prior to buying.
One area that is popular for the holiday-let market due to its collection of theme parks and flexible zoning restrictions is the Kissimmee area. Although in the last few years rental returns here have generally been excellent, there has been the odd instance where over-optimistic claims and dubious guarantees fail to mention the dangers posed by a concentration of short term properties located in a particular area, leading too many properties chasing too few renters.
The value for money of the Orlando – Kissimmee area compared to Britain remains a great temptation; with a furnished 5 bedroom air conditioned property with a pool near the parks is in the range of £170,000. However given the number of these properties bear in mind that if selling in the short term at the wrong time in the property cycle - recovering the Realtors commission, (as the seller you are now paying it!) and over priced furniture costs - may prove a problem. There have been a few recent instances when mortgage valuations have been below the sales price of some Orlando properties – indicating the importance of using an experienced Realtor as a Buyers Broker rather than buying directly from a Developer.
Zoning restrictions on the Gulf Coast can mean a more limited supply of properties which although bad news from the perspective of choice can be excellent news in regard to obtaining rental income. The Gulf Coast is certainly an area that has seen a lot of British interest and tends to fall into two categories.
Areas such as Port Richey, Englewood and Cape Coral offer more property for your money but lack a core of good quality facilities on the doorstep whereas Sarasota/Bradenton and Naples offer an excellent and sophisticated choice of style, cultural, entertainment and shopping opportunities. Although houses are pricier they can command higher rental rates – up to £675 a week. Property in this area tends to rent to Americans from Autumn to Easter and to Brits from Easter to Summer.
Another market for Brits in recent years has been long-term rental properties similar to buy to let in the UK. This group wants to invest in U.S. Dollar property as a savings/pension investment for their retirement. Those looking to buy in this market need to identify locations where there is strong rental demand, good schools and preferably a long wait for properties to be built. This requires Americans moving into the area to rent for up to a year in the school district whilst their property is constructed. Developments, such as Lakewood with the formula in place, have worked well with suitable property approximately £225.000, however trends change so its worth receiving a detailed impartial briefing on the current situation before investing several hundred thousand pounds or dollars!
Finally recent information from The National Association of Realtors chief economist has stated that the fundamentals responsible for property growth will continue, a growing job market, property investment and low mortgage rates by recent historical standards –therefore providing an appropriate property and location is selected the outlook for Florida remain hot in the medium to long term.
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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
Thinking about buying a property in Florida - click here
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Thinking about emigrating to Florida - click here
Thinking about retirement to Florida - click here
Just want to be sent details of suitable agents with excellent testimonials and a proven track record of working with British buyers – click here
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Andrew Bartlett an acknowledged expert on property trends and relocation in Florida, writes articles and answers readers’ questions for several British publications including Florida Magazine, Escape Magazine, Place in the Sun, Sunday Times, America, and The Red guide to buying Property in America and is regularly consulted by journalists and broadcasters. His consumer web guides have received numerous accolades.
Andrew was a Senior Government Official for 20 years before relocating to Florida several years ago where he was headhunted to set up specialist British property and relocation teams for Coldwell Banker and Remax - America’s largest estate agents. He then established a uniquely impartial and independent relocation and property briefing company working between Britain and Florida. He has written a number of watchdog style articles warning Brits about the many disreputable overseas property and emigration selling techniques that are presently operating.
