Buying a property in Florida is a big step. Here are six things you can do to ensure your Florida property investment is a success.
Understand Your Motivation
Why do you want to buy a home in Florida? How will you use it – winter/retirement home, family holidays, holiday rental, purely an investment property, or a combination of these things? How you intend to use the property will influence your choice of location and the property style and size. Some homes are not zoned for holiday rentals. While Orlando has many homes specifically aimed at holiday lettings, coastal areas have a limited supply of such homes, and you will need the help of an experienced local agent to identify them.
Establish a Budget
Decide how much you can afford to spend, and whether you will purchase with cash, or obtain a mortgage. If you wish to finance the purchase, mortgages for foreign nationals are available in Florida. Typically they will require 30-35% deposit and proof of U.K. based assets and income. Alternatively, you may wish to release capital from a U.K. property, or work with a U.K. based lender for the Florida purchase.
Location, Location, Location
Florida is a huge state – about 30% larger than England – so you really need to have a feel for where you would like to purchase. Orlando/Kissimmee is the number one destination for U.K. buyers, followed by Sarasota/Bradenton on the west coast. Orlando is perfect if you plan to spend shorter periods of time in Florida and make regular visits to the many theme parks in the area. A coastal area may be more suitable if you plan on extended stays and would appreciate the opportunity for broader-based activities. Longer stays will allow you to explore the beaches and coastal waterways, indulge in golf and water sports, or spend time enjoying Florida’s cultural offerings: theatre, music, art, museums and much more.
Understand the True Costs
It’s not enough to know the cost of the property. You need to consider “closing costs” and cost of ownership. Closing costs are associated with the process of a buying a home. They may include inspections, stamp duty, title insurance, property taxes and building insurance for instance. If you pay cash for the property, budget 2.5% of the purchase price to cover closing costs. If you have a mortgage, the closing costs may be significantly higher. You should also consider the ongoing cost of ownership. Florida’s gated communities with resort style amenities come at a cost. Be sure you understand the Home Owners Association (HOA) fees and property taxes, and factor these into the annual running costs of the property.
Plan Early for Your Currency Needs
Even a slight movement in the exchange rate between Sterling and the U.S. Dollar can mean a big difference in the actual cost of the home. Early in the process, establish a relationship with a specialist foreign exchange company who will help you change funds at the best possible time.
Choose an Agent, not a House
The property market in Florida is structured in such a way that a single real estate agent has access to all resale properties that are being offered for sale. A good agent will also know local builders and new construction options in their market. Your chosen agent works for you, not for the seller. Typically your agent will share in the seller’s agent’s commission, so their services are free to you as a buyer. All agents in Florida must be licensed by the state, and there are more than 127,000 of them! Try to locate an agent who is a Certified International Property Specialist (CIPS) – this indicates they have gone through additional education to make them more effective at serving overseas buyers like you.
About the Author
Patricia Tan moved from England to Florida in 1997 and for the past 10 years has helped many British buyers invest in Florida homes. She is a Certified International Property Specialist (CIPS), and Graduate Realtor Institute (GRI). Her real estate team www.YourGlobalAgents.com operates from Coldwell Banker in Sarasota, and they can provide buying advice through Coldwell Banker’s extensive network of offices around Florida.