Whats the catch?

chelseablue

Can someone tell me what the catch is to this idea that just popped into my head! Im sure there is one otherwise everyone would be doing it:

Browsing rightmove for properties overseas (for when I win the lottery;) ).

Couldnt believe how cheap houses are compared to here.

My idea was to save a big deposit from our jobs in the UK, buy a property in Florida near Disney with a small mortgage.

For example: http://www.rightmove.co.uk/viewdetails-8778852.rsp?pa_n=3&tr_t=buy&chnl=overseas

Looking on the net holiday villas near Disney rent for £400 - £700 per week.

So my idea was why not buy a place in Florida rent it out to holiday makers and use the rent money to fund a mortgage in the UK.

Im not actually thinking of doing this its just a thought I had today

The flaws I can see are:

1. Property might not be let all the time
2. Can you even get a mortage on a USA place if you dont live there?

As I said if it was as easy as I describe everyone would be doing it so what are the other flaws to the plan?

free4440273

i'm thinking the same thing as you - great find by the way. wondering what the catch is too. the only thing i can think of is perhaps mediocre/bad workmanship (a bit like new builds here i mean).

PasturesNew

If the idea were a winner, people in that street/town/state would be doing it.
They can get the money just as easily as you. Easier as it is in their country.

It isn't the buying of the property that's hard. It is the renting out. All the advertising costs - and who looks after the property? Needs to be cleaned between tenants. Problems need to be sorted out when people are in it - and the property needs to be secure/checked when it is empty.

And there are 101 other reasons why not. But others will list stuff too.

There are enough people doing this/failing in this country. Yet look at their websites and you'll see the cost is £600-1000/week to rent ... but most of the time they are either empty or reservations never confirm or they get knocked down at the last minute as it's empty.

Guy_Montag

chelseablue wrote: »

Can someone tell me what the catch is to this idea that just popped into my head! Im sure there is one otherwise everyone would be doing it:

Browsing rightmove for properties overseas (for when I win the lottery;) ).

Couldnt believe how cheap houses are compared to here.

Makes you think doesn't it:rolleyes:

My idea was to save a big deposit from our jobs in the UK, buy a property in Florida near Disney with a small mortgage.

For example: http://www.rightmove.co.uk/viewdetails-8778852.rsp?pa_n=3&tr_t=buy&chnl=overseas

Looking on the net holiday villas near Disney rent for £400 - £700 per week.

So my idea was why not buy a place in Florida rent it out to holiday makers and use the rent money to fund a mortgage in the UK.

Im not actually thinking of doing this its just a thought I had today

The flaws I can see are:

1. Property might not be let all the time
2. Can you even get a mortage on a USA place if you dont live there?

As I said if it was as easy as I describe everyone would be doing it so what are the other flaws to the plan?

The problem is oversupply of rental properties there - but do check it out.

lynzpower

Guy

whats the state of play in the US property market at the mo, I read in the business it was in meltdown particularly round florida.

movilogo

If executed properly, this is indeed a good idea!

I do think in similar line. UK banks pay around 6% on savings. So, I save my money in India where I get 8-10% guranteed returns on investments. I am also thinking of buying a property in India with a personal loan borrowed in UK at 7% rate. Where as if I borrow same amount of money in India, I need to pay 12-15% interest there.

In today's open economy, it is definitely your choice. However, there is a catch. A big fluctuation in foreign exchange rate will swing the profit to loss. So, it is always a calculated risk. Moreover, you need good help from local (remote) place. Since I have my families in India, I can confidently carry out transactions there.

We are not pioneer in thinking in this line. Just see how many companies manufacture goods in China and sell in Europe/America. In fact, people are doing it all the time

Guy_Montag

lynzpower wrote: »

Guy

whats the state of play in the US property market at the mo, I read in the business it was in meltdown particularly round florida.

Don't ask me, I get my news filtered through GHPC - but with 100+ US mortgage lenders gone bust, I wouldn't get involved in that market yet.

nicola1982_2

well I imagine it is hard work. unlike letting in your country you cannot check the property yourself when it's vacated, nor can you get to the property at short notice. you'd have to do a lot of research.

pinkzebra

Some information on renting out your Florida home.


http://www.buyassociation.co.uk/property/text/florida/survival-books/rental-income.html

mystic_trev

Enjoy Florida living at its finest! Recently upgraded pool home in a popular STR community. This home has so much to offer! Private pool and lanai area, upgraded furniture, low HOA fees and newly tiled. Great location!

There's your answer then! No doubt Bruno will be along shortly telling them they're all going to Hell! :rotfl:

owner

The problem in Florida is resale prices. With so much land to build on (read swamp) they can just throw up new houses all the time, all brand new and modern unlike your old wooden home showing it's age. Who is going to buy yours then ?