If are considering investing in overseas property or simply searching for that dream holiday home abroad then buying property in Florida, USA could be just what you have been looking for. Florida is a state situated in the far south east of the United States, located on a peninsula between the Gulf of Mexico, the Atlantic Ocean, and the Straits of Florida and as such it boasts one of the longest coastlines of any US state.
Florida is an incredibly popular location that is the number one US destination for many British tourists, not to mention the tens of millions of Americans, Japanese and other Europeans who visit annually.
Investment Property Partners overseas property buyers guide covers a number of important issues that you will need to consider if you are considering buying property in Florida either as an investment or as a holiday home abroad.
Buying Property in Florida
“I’m buying a property in Florida, you know”… sounds too good to be true, doesn’t it? The stuff of which dreams are made.
Just close your eyes and picture it – glorious sandy beaches if you want to relax and enjoy the sun, some of the most popular theme parks on earth if you want to get out and about – Walt Disney World, Sea World, Universal Studios… the list just goes on and on.
But more than 50,000 Brits have lived that dream… and now some are enjoying the many benefits of a fabulous holiday home for their own private use, while others have invested in property, which in addition to using themselves, they also let out to other holidaymakers to cover their costs and make a tidy profit in to the bargain.
Don’t forget that Florida is one of the most popular US destinations for many of us Brits, not to mention the millions of Americans and other holidaymakers who visit Florida annually. What a great opportunity!
What about getting there? Florida is about a nine-hour flight from the UK, with international airports at Orlando, Miami and Fort Lauderdale.
Types of Property for Sale in Florida
If you are considering buying property in Florida what types of properties are there be had?
Well, there is a choice of purpose-built flats (called condos over there) constructed in blocks; town homes, which are the equivalent of UK terraced houses; and single-family homes or larger villas.
Typically, most properties for sale in the Florida region are generally built to a good standard, are quite large, have an outdoor pool… and usually come complete with one of those enormous fridge-freezers with integrated ice machine… sounds very appealing, doesn’t it?
What is more, there has never been as much property on the market from which to choose from since the turn of the Millennium – and at such prices to boot.
The Process of Buying Property in Florida
If you are considering buying property in Florida and are concerned about the legalities, rest assured as you will find that legal title there is very robust.
All property transactions in the state are guaranteed to be above board and are also generally less competitive than in other countries.
Specialist title companies oversee the property purchase process which is great news as it grants you as the buyer indemnity against a transaction going wrong.
Buying Property to Let
If you are considering buying property in Florida to let to other holidaymakers and visitors you are in luck, as this is a great option to consider as Florida’s holiday rental scene is very healthy indeed.
However, if you do plan on following the buy-to-let property route it is important that you get independent financial and professional legal advice first… and as with any property investment, you will still have to pay your fair share of local taxes.
Also, if you are buying a condo (what us Brits call flats) make sure you speak to the local “Homeowner Association” (HOA) before you buy.
Each association is different and will have its own particular rules and regulations, which can include minimum rental periods and even age restrictions on your tenants.
Financing your Florida Dream Home
If you are seriously considering buying property in Florida and require some form of mortgage or other property finance be aware that Loan-to-Value (LTV) ratios can vary, and that mortgage terms are usually up to a maximum of 30 years, with the minimum loan amount currently being around the £100,000GBP mark.
Repayment and interest only mortgages are also available and it is recommended that you do your research and shop around for the best local deals.
If at any time you sell the property capital gains tax is paid at a rate of 15 per cent on the profit element.
It is also essential that the funds you use to buy your property in Florida are located in the United States in plenty of time before the completion date.
Also bear in mind that you will have to provide proof of where the money has come from in order to meet the USA’s strict Anti-Money-Laundering (AML) regulations.
You will then find that a specialist settlement company is appointed to make sure that the title to the property is in order… you’ll find that this process is in several ways similar to the conveyancing process that operates in England and Wales.
The settlement company will also oversee the completion of the property transaction, including the transfer of any balance of agreed monies to be paid.
If it is difficult for you to be present at the completion stage don’t worry, that is not a problem, but you would need to allow plenty of time for the documents to go back and forth for signing.
Also, if you are funding your property purchase using a mortgage with an American bank and you’re not available in the USA you will need to have your signatures witnessed on the mortgage documents by an American Notary at the US Embassy in London.
The settlement company then transfers ownership of the property, and this is registered with the Local Authority.
Getting Legal Advice
Should you feel that you need to hire a lawyer to protect your interests, and we strongly recommend that you do, you can check with the Law Society for international solicitors based here in the UK who have experience of property law in Florida… Law Society →
Fees & Property Taxes in Florida
If you are buying property in Florida then we recommend that you allow approximately four per cent of the property purchase price for fees and taxes, although that figure can be cut by half if you buy without a mortgage, as stamp duty is levied on the outstanding mortgage amount and not the purchase price.
Homeowner Insurance… What about Hurricanes?
As far as Florida is concerned there is one insurance consideration that does not apply in most places in the world.
You may have noticed that this is an area that is hit by hurricanes more than any other American state and you will be relieved to know that most home-owner insurance comes with some hurricane coverage.
However, beware… this will usually protect you only against wind damage or falling objects resulting from it – not against flooding. That being so, it is vital that you get flood insurance as well.
If you are unsure about what type of property insurance cover to get then arrange to meet with a representative from a good local insurance company and ask for a detailed explanation of what exactly is covered (and excluded) by your policy before you go ahead and purchase.
Overseas Property Investment Solutions
As a leading independent property and land investment specialists Investment Property Partners offer expert advice and support to clients across our specialist areas of expertise helping them to achieve their investment objectives.
If you are an investor searching for overseas property investment opportunities or a second home in Florida please contact us today to discuss how Investment Property Partners can help you.
More information about Florida… here →
More about and buying property in Florida from Florida Realtors… here →