Florida Holiday Home Investment

As the British Pound increases in value and home prices in Florida become more affordable, many citizens of the UK are looking to Florida as an investment opportunity. When considering buying a property abroad there are a few things to consider.

1. Do Your Research - Whether you're planning to retire in the US or simply interested in a holiday home, it's important to work with a professional who specializes in the type of property you are looking for. Buyers' Agents are paid from the Seller's proceeds, so there is no additional cost to you for using an agent to help you find the perfect home and they will help you narrow down your search to a neighborhood or area that will fit your particular needs. Give your agent as much information as possible to help facilitate the researching process. Make sure they know why you are buying this home, what your long term goals are and how you plan to use the home. Make sure you communicate openly with your agent to eliminate unsuitable properties before your visit to save time and energy.
   
2. Financing Your New Home - Many US lenders will fund mortgages for UK buyers at very competitive rates. We can refer you to a number of agents that will answer any questions you may have about obtaining a mortgage in this country. There are some standard fees that apply to every real estate transaction, and you'll want to factor these in when determining your price range.
   
   Title Insurance: A one-time premium. Insures marketable title of the property against loss or damage from defects to the title. Minimum rates are promulgated by the State of Florida based on price of property and can be approximately .5% of the purchase price.
   
   Home Inspection: An inspection conducted by a qualified professional to determine any defects in the home. Depending on the size of the home, this can range between approximately $200 and $700.
   
   Documentary Stamps on the Deed: Taxes assesed on the transfer of real property. Assessed at $0.70 per every $100 of the purchase price. For example, a $500,000 home would be $500,000 /$100 = 5,000 x $0.70 = $3,500.
   
   Documentary Stamps on the Mortgage: Taxes assesses on the mortgage amount at $0.35 per every $100 borrowed. For example, a $500,000 home would be $500,000/$100 = 5,000 x $0.35 = $1,750.
   
   Property Appraisal: A valuation used by the lender to determine property value. Approximate cost can range between $250 and $500.
   
   Title Processing and Closing Fees: Fees charged by title or closing company. Approximate cost can range between $350 and $600.
   
   Other Fees that can impact your purchase:
   
   HOA Fees: Monthly, quarterly or annual fees charged by the Homeowners Associaton or community's Master Homeowners Association. These fees can range from between $75/month to $2,000/month depending on the community's amenities. You will be provided with a list of fees prior to submitting an offer on the property.
   
   Property Taxes: These taxes vary from district to district and county to county. Property taxes can be between 1% and 1.5% of the property's assesed value. For an accurate tax estimation, ask your agent to provide you with the property's current tax bill.
   
   Community Development District (CDD): A local, special purpose government authorized by Chapter 190 of the Florida Statutes as amended and is an alternative method for managing and financing infrastructure required to support community development. To determine if a home is in a CDD, please visit http://www.cddswf.com/default.asp. If a home is in a CDD this must be disclosed to all buyers.
   
3. Choosing the best location for your holiday home - It is very important to choose a location that best meets your needs. Are you a golfer? Do you love the beach and sun or would you rather relax on your lanai with a friend? Do you need a top notch fitness center? Exciting social calendar? Do you have a pet? These are all things that your agent will need to know so they can show you the communities that will best meet your needs. If you plan to rent your property, you will need to be familiar with the community's rental policies and the property's rental history.
   
4. Managing your Holiday Home - It's important to know that your home is well taken care of, even when you're not at home. For this reason it's important that you hire a reputable Home Watch company to care for your property while you are away. The Home Watch company will visit your property each month and will make sure everything is in working order, including the air conditioning, plumbing and security systems.
   
5. Marketing your Holiday Home - To get the most rental income from your property you will need to market your property to potential renters. First, you must decide whether to rent annually or seasonally. This ultimately depends on if you plan to use the property personally or if you will use it strictly as an investment. Renting annually will spare you the expense of hiring a Home Watch company and will eliminate the need to pay for utilities such as water and electricity while the property is vacant. Annual rental amounts are substantially less than for seasonal rentals, but you are assured income for an entire year while seasonal rentals are more risky. For example, a 2 bedroom condo may rent for $1,100 per month annually but for $3,500 for the months of January, February and March.
   
   It is also a good idea to use a local Rental Company to promote your rental listing both locally and nationally. Gulf Coast Realtors rental department can answer any questions pertaining to renting your holiday home. The rental company will advertise your rental, qualify tenants, prepare paperwork and coordinate payments.
   

Buying a holiday home in Florida is easier than you may think. Call today to speak with us about any questions you may have or to learn more about the tropical areas of Naples, Bonita Springs, Estero and Ft. Myers, Florida.