orrible Posted June 30, 2005 Share Posted June 30, 2005 Ive been asked to invest in a 4 bedroom villa in florida. I have no idea about this type of thing but wondered what the general feeling towards buying such a proerty in that area is at the moment. The property would be purchased on a 30 year repayment mortgage and then rented out for 40 weeks a year through a management company who take 30%. Anybody who knows any positives or negaties please chip in. thanks Quote Link to comment Share on other sites More sharing options...
Gwailo Posted June 30, 2005 Share Posted June 30, 2005 Ive been asked to invest in a 4 bedroom villa in florida. I have no idea about this type of thing but wondered what the general feeling towards buying such a proerty in that area is at the moment. The property would be purchased on a 30 year repayment mortgage and then rented out for 40 weeks a year through a management company who take 30%. Anybody who knows any positives or negaties please chip in. thanks<{POST_SNAPBACK}> Mate, I'd be very cautious if I were you! A good pal of mine has one of these properties close to Disney, it comes to less than 40 weeks rental per-year which means he has to 'chip-in' a lot of his own cash every month. A 30 year mortgage means you will be paying about US $1,000 per-month just in interest during the early years......ouch! Also bear in mind that the US property market is probably at the extreme end of a massive bubble..........do you really want to make a 30 year finncial commitment? Even if you do buy this place, you can't even live in the US for more than 3 months (and I think you are limited to a 6 months maximum per-year anyway). Best avoided my freind. Good luck. Quote Link to comment Share on other sites More sharing options...
<insert name here> Posted June 30, 2005 Share Posted June 30, 2005 Go for it dude. We need overseas investors to help prop up this bubble. A UK-style real estate crash does not bode well for our HELOCs. Quote Link to comment Share on other sites More sharing options...
BufferBear Bitcoin Bull Posted July 2, 2005 Share Posted July 2, 2005 Florida is also in a bubble. Don't bother Quote Link to comment Share on other sites More sharing options...
lesqualita Posted July 7, 2006 Share Posted July 7, 2006 Florida is also in a bubble. Don't bother economic decline, political unstability, rising air prices, hurricanes! avoid florida. Quote Link to comment Share on other sites More sharing options...
Pablo-silver or lead? Posted July 7, 2006 Share Posted July 7, 2006 Until recently (July 2005) we lived in Florida close to Disney. I have 3 years direct experience of the vacation villa market (both sales, rental/management. Sale prices peaked about Sept 05. There are many subdivisions (estates) zoned for STR aimed at Brits. Some have over 30% of the 'New' (bought in the last 3 years) villas for sale and nothing and I mean nothing has sold in the last 7 months. Why the rush for the exit? Well the vast majority of Brits who bought in Central Florida relied on commission driven VI's for advice. They massively overestimated both the number of weeks they could rent and the price they could achieve whilst at the same time discovering cost increases (the rise in insurance and utility charges make ours look cheap), taxes and maintenance. Avoid guaranteed rental schemes unless the T&C of the contract have been read and interpreted for you by an independent Florida Real Estate Attorney. Where is the Villa your are considering investing in? Below is a comparison between figures given out in the ‘Everything America-A Place in the Sun’ magazine and the real figures. Annual running costs of a 4/5 bed Villa note Cost Fix/ Var Cost item A Place in the Sun costs 2005/06 $US Actual costs 2005/06 $US * F Mortgage? 14763.00 F Mortgage 25 yrs ($319200.00 @ 5.5%) 23520.00 ** F Property Taxes 4219.00 5700.00 *** F Tangible PP Tax Not included 144.00 F Home Owners Assoc Fee 350.00 420.00 F Pool & Lawn 2400.00 2400.00 F Insurance 1080.00 1200.00 F Minor Repairs & Replace 300.00 500.00 F Major Contingency fund Not included 1320.00 V Electricity 2040.00 2400.00 V Water 780.00 960.00 F Phone 540.00 540.00 F Cable TV 540.00 540.00 F Pest Control 360.00 540.00 V Two Cleans per Month 2400.00 2400.00 F Spring Clean + Carpet Clean Not included 360.00 **** F Admin Fee? 780.00 Not included **** F Management Fee Not included 1440.00 F Occupational License Not included 60.00 F Hotel & Motel License Not included 180.00 F Annual Air Con Service Not included 90.00 F Pool Heat Pump Service Not included 90.00 F Termite Inspect/Insurance Not included 130.00 F Account Fee/Tax return Not included 600.00 ***** Total 30552.00 45534.00 Notes * A Place in the Sun state they are using an interest rate of 4.63%. They make no mention of a deposit on the property or how much is being funded on mortgage. There is also no mention of the mortgage term i.e. 25, 30 or 50 years? ** Property tax is collected by the state and is the equivalent as UK council tax. *** TPP stands for Tangible personal property tax and is payable to the County. If your property is rented out, you are classed as a business and have to pay a tax on the value of the contents of your villa. **** A Place in the Sun state a $65.00 per month ‘Admin fee’. We have incorporated this in the $120.00 per month Management charge. ***** A Place in the Sun annual running cost came out at $31572 not the $30552 that they added up to. For the purpose of our comparison we are using their $31572. Cost Fix/Var. Only two cost items are variable relative to the occupancy rate of a villa. That is water and electricity. We have assumed these costs as at 36 weeks occupancy, because that’s the minimum quoted in A Place in the Sun. The figures came out jumbled but the bottom line is a Place in the Sun said the estimated annual running costs were $30,552 when in reality they are $45,534 and increasing. Be very, very careful Florida is like southern Spain but with more scams! Pablo Silver or Lead? Quote Link to comment Share on other sites More sharing options...
dogbox Posted July 7, 2006 Share Posted July 7, 2006 Florida is not an investment arena, its far too late for that. This is a point new investors often cant grasp. I still hear people wanting ti 'invest' in Spain. Because such areas have such high prices the returns all round AND IN THE LONG TERM just dont add - up. If you look to current trends with institutional investors, they are heavily into new non - boomed areas such as East Germany, the Baltic states, Sloveina et al. If you want luxury villas (built by large international high end developers) with year round weather, huge unspoiled beaches, top golf course and only a 3 hour flight (to the med coast that is), then you might want to consider Morocco as I have (yawn - sorry everyone, my enthusiasm grates on some I realise). Prices about 75% less than COMPARABLE villas in Spain (by comparable I mean 'on - golf' 'on beach' not inland 'top ammenities etc). http//www.lejardindefleur.com). Quote Link to comment Share on other sites More sharing options...
cocacolalight Posted July 7, 2006 Share Posted July 7, 2006 Florida is not an investment arena, its far too late for that. This is a point new investors often cant grasp. I still hear people wanting ti 'invest' in Spain. Because such areas have such high prices the returns all round AND IN THE LONG TERM just dont add - up. If you look to current trends with institutional investors, they are heavily into new non - boomed areas such as East Germany, the Baltic states, Sloveina et al. If you want luxury villas (built by large international high end developers) with year round weather, huge unspoiled beaches, top golf course and only a 3 hour flight (to the med coast that is), then you might want to consider Morocco as I have (yawn - sorry everyone, my enthusiasm grates on some I realise). Prices about 75% less than COMPARABLE villas in Spain (by comparable I mean 'on - golf' 'on beach' not inland 'top ammenities etc). http//www.lejardindefleur.com). Great post by Pablo. Florida is a BIG place. It's a bit like saying I have been asked to buy a house in the UK - good idea? But generally you have missed the boat. Another big problem with Florida is just how much harder it is to get in after 9-11. It is no fun at all at the airports and that puts return visitors off. Rentals are ten a penny. You can get them for below cost most of the time. Many just sit empty. Morrocco may be cheaper than Spain, but not by 75% even for golf resorts (see Polaris resorts for example). Quote Link to comment Share on other sites More sharing options...
Pablo-silver or lead? Posted July 8, 2006 Share Posted July 8, 2006 Orrible Did you buy it! Where is it Tierra del Sol, Millbrook Manor, Sandy Ridge, Tuscana, Orange Tree, Solana, Highrove? Whats the price? Do you have any specific questions that the Real Estate sales person will shy away from e.g. How many different licenses and taxes will I be liable for in the State of Florida as an absentee UK owner? Answer 7. Will I need a VISA to vist my own villa? Get a good US lawyer and an accountant befor you do anything. Pablo Silver or Lead. Quote Link to comment Share on other sites More sharing options...
whiterabbit Posted July 12, 2006 Share Posted July 12, 2006 Just got back from 2 weeks in Florida and Georgia. My company has a big office in Atlanta and a small one in Tampa. I generally agree with everyone else and have a few extra points: The property tax and house insurance have gotten very high in florida. Bank on $1000 each per 100k in house valuation in Florida. This means potentially 10k per year on a mid size villa. Don't buy anywhere inland (especially Orlando) and rely on rental of capital gains anymore. Too many new builds, too much land. Gainsville may be the only exception to this (university expansion). You may still do OK in areas such as Clearwater and the Northern West coast (New Port Richey). A few people in our office have bought decent little cottages (1940s) for $250k and can walk/cycle to work and the beach, very nice. Dont expect to make money on the rent but may be a good buy if you intend to retire there in a few years or want a very nice holdya home etc. There are a lot of new companies reloacting to Tampa and the job market has got much better so this may still frim up prices. A lot of people I work with are considering moving to Georgia mountains or coastline. Lower prices, higer earnings and low insurance etc. Seems like a lot of retirees move to Florida then miss the seasons so relocate to Georgia or the Carolinas. Also GA is doing away with state icome tax on over 65s by 2008. May be worth looking at. Same applies to downtown Atlanta. I spend quite a bit of time there and am considering buying a flat (to own for myself not rent). Quote Link to comment Share on other sites More sharing options...
MarkG Posted July 12, 2006 Share Posted July 12, 2006 Yep, I've seen a number of people recently complaining that their insurance keeps on going up and up and up in Florida. We're right around the peak of the hurricane cycle, and insurers aren't planning to take a loss. Combine that with oversupply, a house bubble and American immigration policies that discourage tourism, and I think you'd have to be mad to buy in Florida. On the other hand, in five to ten years after prices drop 75%, it might be a good deal. Quote Link to comment Share on other sites More sharing options...
Pablo-silver or lead? Posted July 13, 2006 Share Posted July 13, 2006 Whiterabbit mentions retirement relocation to florida. From the Uk there is no retirement visa available. Pablo Silver or Lead? Quote Link to comment Share on other sites More sharing options...
whiterabbit Posted July 13, 2006 Share Posted July 13, 2006 Whiterabbit mentions retirement relocation to florida. From the Uk there is no retirement visa available. Pablo Silver or Lead? My overall point is as a UK investor expecting to make money forget it. However some nice reasonable areas still exist if you are living or working in florida or can afford to have a holiday home just for yourself. I was talking about US and Canadian East Coast retirees (30 mill in the next 10 years). They retire in droves to Florida for the weather, cheaper taxes, golf etc. Most however do not want to be in the central part of the state. Lots as discussed also stay a few years then relocate to GA, NC, SC and TN as the lack of seasons gets old. Yes you are correct there is no retirement visa however I know a good few people lately who have gotten by this by "investing" in a US firm. As for buying there if you have a good job for instance in Tampa the place is still a good deal relative to income. There are literally tons of businesses relocating to Tampa and Jacksonville from Northern States. In my opinion if you make $100k a year and can buy a nice 4 bed house with pool within 5 miles of work for $250k then things are good! Its such a big state its very difficult to generalize but as everyone is saying stay away from Orlando, Kissemee etc. Horses for courses really. Quote Link to comment Share on other sites More sharing options...
Pablo-silver or lead? Posted July 18, 2006 Share Posted July 18, 2006 Orrible don't tell us you went to Florida and the deal looked so good you bought two? What have you decided? Pablo Silver or Lead? Quote Link to comment Share on other sites More sharing options...
I'M WITH STUPID Posted August 10, 2006 Share Posted August 10, 2006 An article in todays NYT US HOLIDAY HOME MARKET Quote Link to comment Share on other sites More sharing options...
OLDFTB Posted August 10, 2006 Share Posted August 10, 2006 “‘We don’t think the bottom is here yet, we think the bottom is six months away,’ said Ed Bonkowski, a Fort Myers-based real estate broker who said he represents $25 million from investors. ‘The sellers of property are in denial right now that they’re not going to lose money on their deals, and they will. The main thrust is the speculators: They have completely disappeared off the face of the Earth.’” Link: http://thehousingbubbleblog.com/?p=1225 Looks like it's all going "Pete Tong" in goold old Florida, USA Quote Link to comment Share on other sites More sharing options...
Pablo-silver or lead? Posted August 10, 2006 Share Posted August 10, 2006 The bottom of the Florida Mkt is at least 18 months away. 2005 5 bed villa with pool $320k 2007/8 5 bed villa with pool $200k or less. Pablo Silver or Lead? Quote Link to comment Share on other sites More sharing options...
whiterabbit Posted August 11, 2006 Share Posted August 11, 2006 The bottom of the Florida Mkt is at least 18 months away. 2005 5 bed villa with pool $320k 2007/8 5 bed villa with pool $200k or less. Pablo Silver or Lead? Where can you get a 5 bed villa with pool for $320k You know a weakening dollar may counteract the decline and encourage more overseas buyers? Quote Link to comment Share on other sites More sharing options...
Pablo-silver or lead? Posted August 11, 2006 Share Posted August 11, 2006 http://realtor.com/Default.asp?poe=realtor got to realtor.com, search Kissimmee, Clermont or any other STR villa area of Polk, Orange, Lake or Oceola counties. How many do you want a thousand? Nothing selling hundres more distressed sales coming onto the market. As I say why buy now and loose a stack of money. Pablo Silver or Lead? PS even withought a mortgage it'll cost $1,300 a month just to pay the running cost. Not smart on a depreciating asset! Quote Link to comment Share on other sites More sharing options...
whiterabbit Posted August 11, 2006 Share Posted August 11, 2006 http://realtor.com/Default.asp?poe=realtor got to realtor.com, search Kissimmee, Clermont or any other STR villa area of Polk, Orange, Lake or Oceola counties. How many do you want a thousand? Nothing selling hundres more distressed sales coming onto the market. As I say why buy now and loose a stack of money. Pablo Silver or Lead? PS even withought a mortgage it'll cost $1,300 a month just to pay the running cost. Not smart on a depreciating asset! Those are not nice areas either. Wonder if this will impact the really nice areas. I heard Naples had gone down a bit aswell. Quote Link to comment Share on other sites More sharing options...
dessie123 Posted August 13, 2006 Share Posted August 13, 2006 Those are not nice areas either. Wonder if this will impact the really nice areas. I heard Naples had gone down a bit aswell. anecdotally: Just returned from a month in Florida! I was astounded by the sheer volume of for sale signs all across the state. In some areas (in particular around the panhandle) I would estimate that over 3/4 of the beach side properties were up for grabs! I loved a TV news report last week I saw which showed the Real Estate agents in the Tampa area, getting together weekly (so much spare time) to goto church and pray to the Lord for SOME business because they absolutely had NONE. Typically American and an eyeopener for Brits who only ever believe in good times in the property game!! Quote Link to comment Share on other sites More sharing options...
whiterabbit Posted August 15, 2006 Share Posted August 15, 2006 anecdotally: Just returned from a month in Florida! I was astounded by the sheer volume of for sale signs all across the state. In some areas (in particular around the panhandle) I would estimate that over 3/4 of the beach side properties were up for grabs! I loved a TV news report last week I saw which showed the Real Estate agents in the Tampa area, getting together weekly (so much spare time) to goto church and pray to the Lord for SOME business because they absolutely had NONE. Typically American and an eyeopener for Brits who only ever believe in good times in the property game!! Yes some of the panhandle is a joke. It was nice when you could get a little beach cottage for $150k but now they are more like $1 milllion. I do know some people from Atlanta who like it though (especially Destin) as it is the nearest coastline but not at the recent prices. Quote Link to comment Share on other sites More sharing options...
dessie123 Posted August 15, 2006 Share Posted August 15, 2006 Yes some of the panhandle is a joke. It was nice when you could get a little beach cottage for $150k but now they are more like $1 milllion. I do know some people from Atlanta who like it though (especially Destin) as it is the nearest coastline but not at the recent prices. I noticed Destin did seem to be a very high price area. But the whole area appeared overpriced. I will watch with keen interest as to how far the properties fall in value and how long it takes as I could not imagine another environment in the deveoped world so clearly on the precipice of a huge crash! Who seriously would buy at those prices if every property for miles around had FOR SALE signs outside.............. Quote Link to comment Share on other sites More sharing options...
whiterabbit Posted August 16, 2006 Share Posted August 16, 2006 I noticed Destin did seem to be a very high price area. But the whole area appeared overpriced. I will watch with keen interest as to how far the properties fall in value and how long it takes as I could not imagine another environment in the deveoped world so clearly on the precipice of a huge crash! Who seriously would buy at those prices if every property for miles around had FOR SALE signs outside.............. Agreed, did you go as far as Port St Joe and St Georges Island? Crap built houses, no resturants and mosquitos everywhere. I still think the GA and SC coasts are great though at less money! Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.