Perhaps the biggest ‘pro’ for Florida investment real estate is that it can help to balance your portfolio –
– for example by diversifying out of other types of markets (e.g. stocks and shares) or by expanding your investment geographically (always with an eye on the expected movement in the £/$ exchange rate, if that’s predictable).
And a dream home in the sun is always a great place to use for a holiday if no one else is in residence!
There are several other advantages:
- Good rate of return: historically, real estate has produced a high rate of return for owners/investors, well in excess of inflation.
- Leverage: financing is typically available for approximately 70% of the purchase price.
- Equity build-up: as property appreciates in value and any loan is paid off, investor equity accumulates.
- Tax advantages: there are both income and capital gains tax benefits, although this of course varies by country and by individual.
Remember, though, that there are disadvantages too:
- Lack of liquidity: the real estate sales process can be lengthy if you wish to turn your asset back into cash.
- Local market: unlike popular stocks and shares, the available market is specialized and local.
- Purchase and ownership costs: buying and selling incurs substantial commissions and taxes; ownership imposes maintenance and rent collection burdens.
- Risk: increasing costs can negate investment returns and property prices can go down as well as up.
The overall message to emphasize, though, is the usual one with any investment: if in any doubt about the course of action you’re planning, seek professional advice before making any commitment.
Or click here: Contact Us to send us any questions you have about investing in Florida real estate.