Buying Property in Florida
Whether you are looking to move there permanently, or looking for a buy to let investment in Florida, the first thing to get right is exactly where in Florida you would like to find a property.
Orlando offers a vast array of visitor attractions and has a vibrant nightlife, whilst the famous beaches and the fast-action lifestyle attract many to Miami. The Atlantic east coast is becoming increasingly popular with investors, and if you are looking for a more relaxed pace of life, consider looking along the quieter Gulf Coast.
Due to extensive development, as with anywhere you need to look carefully at what is on offer. Visit the area yourself and look carefully at the location and the amenities near by. Use a local agent or one of the Florida property specialists to provide you with detailed information on where you are considering buying, and comparative market data on houses in that area.
Once you are ready to make an offer on a house, get hold of as much detailed market information as you can. Try to get prices of recent property transactions in your selected area. This will provide you with a firm basis upon which to make an offer:
You need to consider the following when investing in property in Florida::
- How many bedrooms and bathrooms will you require?
- Is the property to be used purely as an investment, or will you live there at some point?
- If you intend to use the property for rental purposes this may affect the size required.
- Do you want a private pool or is there a community pool?
- Do you want to pay the additional premium for a lakeside or waterfront plot?
- Do you like to have seclusion, or do you want the security of a gated community?
Pre-owned or new-build?
Decide if you want to buy a pre-owned property or if you are happy buying off-plan.
A pre-owned house can often be purchased more quickly, completion usually takes between thirty and sixty days, this varies from State to State.
A new house can take up to a year to complete but often offers you the chance to buy at a discount, and you get to select your own choice of decorations and fittings. Financing new-build can be varied too, some builders only require a 5% deposit before building your house with no other payment until completion; this can represent a significant saving as other builders may require substantial stage payments.
Other costs and fees involved when buying in Florida
You need to consider the following over and above the cost of your chosen property:
- Mortgage application fees
- Mortgage tax stamps
- Appraisal valuation fees
- House Inspection fees
- Title fees (an insurance policy that protects a lender's or owner's interest in the property from other claims of ownership)
- Insurances: property and household items
- Property tax: depends on value of property
- Homeowner Association fees: if applicable
- Pest Control
- Water bills
- Electricity bills
- Lawn and Pool care if applicable
- Phone charges
- TV cable rental
The tax implications of buying and renting property depend upon your individual circumstances – you should seek advice from a UK and US tax advisor.
What about a mortgage?
The minimum Overseas Investor deposit requirement is 20% down, but can vary up to 35%. As a general rule the higher the deposit made the lower the mortgage interest rate. A number of different mortgages are available with a summary below of the main types:
- A UK Sterling mortgage, available from a major UK bank allows the mortgage to be converted from dollars to sterling at the time of buying and therefore reduces certain exchange rate risks.
- A US dollar mortgage is usually at a fixed rate for a 5, 15, or 30 year term. Beware of the implications of an up-front payment, referred to as ‘points’, which can have a significant effect on the cost of your mortgage.
If you are looking for buy to let opportunities in Florida, or plan to rent out your property for some parts of the year, you should be aware that there are strict ‘zoning’ requirements in most Florida counties. Zoning regulations stipulate the length of period properties can be rented out for. Some counties allow two week rentals but others may prescribe a minimum rental period of four weeks or even six months. This can limit the type of people who will rent your property.
Tips if moving to Florida
Banking / Credit cards.
Keep your UK bank or credit card accounts even if you are moving permanently to Florida. If you do not already have an American credit card, you will find them hard to obtain in the early days, as you will not have built-up an American credit rating.
Obtaining a reasonable rate for car insurance can be a problem in your first year, but you may will need it if you want to buy and keep a car in Florida.