Whats the catch?

dannyboycey

I own properties in France and Portugal, so can't speak for the US. However, it's not as easy as it may first appear. There is a lot of legal stuff and paperwork to get your head round and there are often many nasty 'hidden fees'! Aside from that, places that are real beehives in the summer season can be deserted and depressing off-season. If you're thinking of going through with it, my best advice would be to get help from an independent adviser and do LOTS of research!

epz_2

as i understand it americans basicly think homes over 30yrs old are pretty worthless and tear them down to rebuild. not that bad a thing when you build a pine house on swamp land but it basicly means your house value depreciates to the value of its land over that time which aint much.


also might want to check out the insurance companies track record on paying out due to hurricanes etc, im sure there are loads of folk who get ripped off and never payed, ive met at least two.

Doozergirl

I have no idea if it's a good idea. But I'll just throw in the fact that my IFA has done all the exams and is qualified to sell mortgages to people buying in the state of Florida. There's only ah nadful in this country, apparantly. If you want his contact details for a chat, then just ask. He'll certainly be able to give you firmer figures.

Badger_Lady

The idea itself is great, but as Dannyboycey says you have to do a lot of research and planning to kick it off.

My parents own two holiday villas in Southern France and are thinking of adding a third - the villas are booked solid through summer (well in advance), and bring in up to £900 a week. There are resorts near the equator where the winter weather is barely different from summer and you can get this figure all year round.

My parents have a trusted caretaker that manages the properties, and their promotion is done cheaply online (with the help of my web design skills!). And the investment has enabled them to retire mortgage-free at the ages of 45 and 49.

My only question would be about doing it in the US - there must be some more complicated laws (for being outside the EU), and although I know very little about the market their economy ain't doing too well.

Your idea is excellent, Chelseablue, as long as you know your market thoroughly!

BobProperty

I'm not sure STR means Sell to Rent in this context. I do go on a couple of property related American forums and can tell you the market is in meltdown in certain places, Florida included. They are also tightening loan requirements (having previously let anyone who could breathe get 100% self dec ARMs) and IIRC someone has now put a minimum of 8% on their loan rates.
If you can rent it (see later) it is unlikely to make money. I read ex-pat forums about doing this a while back and the general consensus was that you would be lucky to break even. If you want a nice holiday home fine, if you think you will make money at it, sorry no. It has already been pointed out that many of these villa websites may have £700 per week asking prices but whether they are getting them is another matter.
One general "spanner in the works" is what we would call "building insurance" is now near impossible to get following the recent hurricanes. That or it's expensive and full of excesses and get out clauses.
Now the punch line(s) -
I bet it isn't "zoned" for holiday letting. I notice it doesn't say it is on the "Realtor's" information, so my guess is it isn't allowed. That keeps the price down.

You may have to fit in with the community rules, some of which can be a bit funny.

You also realise you can only stay there 6 months max as a UK citizen because of the US's anti-terrorist rule tightening.

It looks cheap because you are getting $2.0x to the £1.

free4440273

BobProperty wrote: »

I'm not sure STR means Sell to Rent in this context. I do go on a couple of property related American forums and can tell you the market is in meltdown in certain places, Florida included. They are also tightening loan requirements (having previously let anyone who could breathe get 100% self dec ARMs) and IIRC someone has now put a minimum of 8% on their loan rates.
If you can rent it (see later) it is unlikely to make money. I read ex-pat forums about doing this a while back and the general consensus was that you would be lucky to break even. If you want a nice holiday home fine, if you think you will make money at it, sorry no. It has already been pointed out that many of these villa websites may have £700 per week asking prices but whether they are getting them is another matter.
One general "spanner in the works" is what we would call "building insurance" is now near impossible to get following the recent hurricanes. That or it's expensive and full of excesses and get out clauses.
Now the punch line(s) -
I bet it isn't "zoned" for holiday letting. I notice it doesn't say it is on the "Realtor's" information, so my guess is it isn't allowed. That keeps the price down.

You may have to fit in with the community rules, some of which can be a bit funny.

You also realise you can only stay there 6 months max as a UK citizen because of the US's anti-terrorist rule tightening.

It looks cheap because you are getting $2.0x to the £1.

hmmm. very informative. thank you - so there are indeed several catches!

chelseablue

free4440273 wrote: »

hmmm. very informative. thank you - so there are indeed several catches!

Yes, dont think I'll be bothering!

free4440273

chelseablue wrote: »

Yes, dont think I'll be bothering!

me neither - think it was just wishful thinking on my part after i had read your OP. still, a good discussion had

BobProperty

Thought I'd better give everyone an update, since my previous comments turn out to be "sort of" correct but not the real story. Posted a question about it on a site I go on in the US and this is one of the detailed replies from a Florida resident:

Kissimmee is about twenty miles south of Orlando; it's where Disney World is, and it's generally surrounded by very planned communities like Celebration and Harmony. Stepford communities. If you're used to being near things, Kissimmee is probably the last place you want to live - it's definitely in exurb territory. Nearby Clermont is the same way. The commute into Orlando's a !!!!!, and just forget Tampa. I have no idea what the zoning rules in Kissimmee are, but I can't imagine they're particularly strict.. the place is four steps up from a big trailer park. Aside from Disney, Kissimmee's big claim to fame in past years has been Gatorland - literally, an alligator ranch.

Generally speaking, right now is an absolutely awful time to buy a house in Florida, particularly in Central Florida. Last I heard, we have about 20K units on the market, the prices haven't appreciably dropped - delusion, delusion, delusion. And ARMs. Lots of people bought into the "Florida investment property" hype during the bubble and still figure that they can't lose money; they figure people will always be moving to the Sunshine State, everyone loves Disney, so just wait for the market to catch its breath and people will buy! And that's how we end up with $500K houses on the block for two years in a cesspool like Fort Myers.

The other thing to be concerned about is that really, REALLY bad things are about to happen here. Our idiot governor is making some catastrophic mistakes involving insurance companies, which will (based on past similar efforts) drive them out of the state and put the rates through the roof. He's now doing the same thing with auto insurance. On top of that, the state gets a huge amount of money in property taxes that now aren't being paid, so some really nasty budget cuts are coming down. I've lived here most of my life, and I've seen some bad times, and Florida's my home, but I gotta tell you.. even I'm starting to consider relocation, depending on how the next few years roll.

And that's hoping for good weather. God help us if we get hit by a serious hurricane anytime in the next few years.

All I can say is, if ANYONE is considering buying Florida property right now, do your due diligence and do it hard. You might get a decent deal. Most likely, you'll get taken. We here love snowbirds, particularly Brits - they bring hard cash, don't stay all year, and often don't really do their research before buying into the Florida retirement dream. Just watch it, is all I'm saying. _________________________
Less Urban: All The Global Warming Your Gas Tank Needs

The conclusion on STR is that it stands for Short Term Rental, so the place is zoned for letting to holidaymakers. What it also likely means it that the entire estate is holiday homes. I did a few searches on a MLS service and there are a heck of a lot of properties on sale at present.