VILLAS FOR SALE IN FLORIDA
WITHOUT FINANCING COSTS, WHAT PRICE RANGE WOULD LET ME COVER ANNUAL RUNNING COSTS?
Villas for sale in Florida in the $250,000USD and up should be capable of generating rental income to cover the running costs for a cash buyer, if you buy the right house, in the right location and use the right management company. The reason the lower priced units are hard to get a return is that they are smaller and usually older and need updating. Many are not in resort communities and have been left behind in terms of potential for high occupancy bookings. This is not to say that it can’t be done, but it’s less likely. Please note that this is what we have found in general, however, we have clients that are in positive cash flow, that bought smaller units.The economy of scale for the larger and newer homes simply give a better chance of a return. Please contact us for a personal conversation if you are considering a villa or flat for less that $250,000 USD so we can guide you on the steps.
I’M A BUY TO LET INVESTOR IN THE UK. IT’S A MARKET I KNOW AND UNDERSTAND. SO WHY WOULD I EVEN CONSIDER VILLAS FOR SALE IN FLORIDA?
1. Disney and Universal lovers/families that visit at least once or twice a year and have decided to own a property here rather than spend thousands in accommodations each visit.
2. Clients from the UK, northern US. or Canada that want their very own place in the sun while escaping their dreary climate at home.
3. Clients that are already in the buy to let or short term holiday property market and looking to expand.
4. Clients that have the ability to work remotely, or want to retire, and realize a place in the Florida sun ticks a lot of quality of life and investment choices.
5. Clients that wish to diversify their portfolio.
So to complete the answer to why Florida Property might fit your goals, we suggest three reasons:
- The asset value is rising strongly. The market has been extremely strong in recent years, with house prices rising on average over 10% p.a. Then consider that with the larger villas for sale in Florida, you can also make 5-10% profit annually from rentals while your property is rising in value each year. That’s an excellent return at a time when traditional investments are yielding diminishing ROI.
- A strong desire to spend as much time as possible in Florida, perhaps because of a young family (it’s hard to imagine a better holiday destination) or simply a love of the climate, which is great all year round. Such buyers offset as much of the cost as possible through rentals when they’re not using the home, but really value having a base in the state to use as and when they wish.
- The UK buy to let market is steadily becoming less attractive. As it becomes less tax-efficient and cost-efficient, we hear from plenty of people who are saying, ‘I should spread the risk of my portfolio and look into a different country.’
Additionally, with current record-low UK interest rates, which experts agree are not going to rise a great deal for some time even before the possible impact of eventual Brexit, parts of an investment portfolio can be performing very poorly at the moment and therefore Florida property can be even more appealing given the market trends over the last few years (see below).
We hear from people who have built a buy-to-let portfolio in the UK but because that’s becoming less attractive to some people, they’re now putting their efforts into a US empire instead.
WHY MIGHT I NOT?
If people come to us and say, ‘We’re going to take everything we own and put them into a single Florida property’ we tell them they probably shouldn’t do that.
Equally, if they say, ‘We absolutely must cover all of our costs including loan fees in a house under $350,000,’ we tell them that’s probably not a realistic plan.
If they say, ‘We can’t afford the ups and downs of each month,’ where some months you’ve got surplus and others you don’t because of high seasons and low seasons, then again we tell them that’s not a good idea.
If you’ve got a great buy to let portfolio in the UK that you’re happy and knowledgeable about, then it may not make as much sense to enter a market you’re not as comfortable with. And if you want to buy property and treat it as a passive investment – purchase a house, hand it over to a management company and do absolutely nothing else from one year to the next, while expecting to make a fortune – that’s not a good plan either.
But if you are looking for a dream home that you will get great enjoyment from; or if it’s part of a portfolio of investments; or you understand that running costs mean a smaller house won’t cover its costs through rentals alone; or you’re simply a huge fan of the Sunshine State, then those are the reasons to buy villas for sale in Florida.
WHAT ARE THE TAX IMPLICATIONS? DO I HAVE TO PAY UK TAX, US TAX OR BOTH ON MY PROPERTY INCOME?
You need to submit tax returns in both countries, but in the case of US tax, it’s extremely likely that you’ll pay little to no tax. You are required – it’s not optional – to depreciate the home over 27.5 years. You can usually offset the costs of flying out to inspect your home once a year, and of doing maintenance. So you’ll pay commonly no tax (unless your rental income is astoundingly good). Even if you do pay US tax, because of double taxation relief, you can usually offset this when considering your UK obligations, rather than paying twice.
Because this is such an in-depth field, we work with specialists and we put our clients in touch with US tax accountants (and we know UK ones too if you need one).
WHAT ARE THE FLORIDA PROPERTY TRENDS, HOW HAS THE MARKET BEEN PERFORMING IN RECENT YEARS?
The global downturn of 2008 undoubtedly hit the market price of villas for sale in Florida hard. But in the last few years in particular, the market has been performing extremely impressively, with double-digit growth annually in property prices to bring them back towards the sort of prices of the pre-crash market. That means there’s still significant opportunity for savvy investors. Then we had the co-vid crisis of 2020. Many of us predicted another severe downturn, and the opposite actually happened. We are just coming off the greatest frenzy that we have ever experienced in Florida Real Estate. We actually had clients bidding against 50-70 other buyers on a home. The homes were actually selling for $20,000-100,000 over asking price. The Florida Real Estate market is just now stabilizing back to a better balance between a buyers and sellers market, and we feel that there are still great opportunities.
It’s difficult to see that situation changing in the short-term, but of course no investment is guaranteed and we would never suggest otherwise – anyone doing so is not someone you should put your faith in. It is a buoyant market, with plenty of demand and a thriving building & resale market.
As with any market, even London’s property market, nobody can predict the future (there have even been murmurs of gloom in the UK given the recent economic uncertainty post-Brexit). But it is true to say that in Florida there are a lot of buyers, many new developments catering to that demand and the Realtor’s Association is predicting solid growth over the coming years. The signs look good.
A good adviser tells you how it is, they do not simply give you great marketing messages to encourage you to buy an unsuitable property and then leave you to it once you’ve completed. And so our way is to avoid marketing hype and stay in support even after you’ve bought your home – we’re proud to be long-term friends with many of the people we’ve helped buy over the years and still help with any queries they have, and happily so.
If that’s the sort of approach you value, then get in touch using the Contact form at the top right of this page and let’s talk about how we might be able to help you. If you need to chat with us now, you can call or text: +1 407-908-8023
WHAT OUR CLIENTS SAY:
Very excited by our new purchase and cannot thank you enough. You were such a help through very unfamiliar territory. Would be more than happy to act as a reference any time.
G.K., Kent, UK
You helped us from start to finish and beyond . . . from finding and choosing the plot through to furnishing the house and helping to set up the utilities once we had closed on the home – a “one-stop shop”. You made it all so smooth and trouble free for us. We were so far away in the U.K. . . . I don’t know how anyone does this without your help.
B.R., Derby, UK
Chris helped me to build my real estate holding from 0 to 5 homes worth almost $1 million dollars in just over 3 years, including 3 Disney Orlando Vacation homes. All were sold for a profit, which I give credit to Chris, who knows the Florida Real Estate market so well.
Anne S. Orlando
It looks so easy from the Internet sites. And some other Realtors play down exactly what is involved. What Colin showed us and what he did meant that we were kept informed at every stage. He made sure that we knew what we needed at each stage, from buying through to setting up the home and managing it the most effectively. We want to thank him for everything.
V.B., Exeter, UK
We just want to say how much we value the work that Colin did for us. His advice helped us to avoid what could have been some big mistakes and he showed us how to find the place we were looking for – or rather, the home that best fitted our plans both now and in the future. It’s amazing, looking back, how much Colin’s challenge to our preconceptions changed our thinking. I’m delighted both that we were referred to him and that he continues to give us support when we require it.
R.H., Oxford, UK