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I'm thinking about buying a property in Florida to rent out as an income property and to use as my own personal use. Anyone else has done this?
Thoughts on investing on a vacation home in Florida?
- Thread starter winterstorm35
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I looked at this seriously during the big crash a few years ago and decided against it.
In my case one of the key factors was my age. Simply put, since I'm older, it would be cheaper to rent vacation facilities rather than own them. For a younger person with a longer pay back period it may be different. In addition I already owned a Class A motorhome and I enjoy the freedom of being able to move around to different areas from year to year rather than being tied down to one neighbourhood which could easily deteriorate as so many here have already done. (I'm actually in the Kissimmee/Orlando area of Florida at the present time)
Home prices are going up again but they are still reasonable here. The change in our dollar over the last year, however, has seriously eroded any advantage in price that was here as recently as a year ago.
There is also a glut of vacation home properties on the market. Many Brits and Canadians have bought homes here, especially before the big crash, and are attempting to divest. You'll find many neighbourhoods here where there are very few owner/occupiers and many absentee owners - add to that houses abandoned by their owners during the crash - makes for spooky streets.
If you do decide to go this way you'll need to do some serious research vis a vis property/school taxes (which vary by county etc and many have higher rates for foreign owners) IRS rules on residency (which may draw you into various parts of the US tax system) insurance for rental properties; management services, cleaning services, annual pest control (termites are big down here) pool maintenance, lawn maintenance, etc. After I ran all the numbers I concluded that the transaction just didn't make enough economic sense for me. (Again the numbers may work better for you if you run it longer term)
:cheers:
In my case one of the key factors was my age. Simply put, since I'm older, it would be cheaper to rent vacation facilities rather than own them. For a younger person with a longer pay back period it may be different. In addition I already owned a Class A motorhome and I enjoy the freedom of being able to move around to different areas from year to year rather than being tied down to one neighbourhood which could easily deteriorate as so many here have already done. (I'm actually in the Kissimmee/Orlando area of Florida at the present time)
Home prices are going up again but they are still reasonable here. The change in our dollar over the last year, however, has seriously eroded any advantage in price that was here as recently as a year ago.
There is also a glut of vacation home properties on the market. Many Brits and Canadians have bought homes here, especially before the big crash, and are attempting to divest. You'll find many neighbourhoods here where there are very few owner/occupiers and many absentee owners - add to that houses abandoned by their owners during the crash - makes for spooky streets.
If you do decide to go this way you'll need to do some serious research vis a vis property/school taxes (which vary by county etc and many have higher rates for foreign owners) IRS rules on residency (which may draw you into various parts of the US tax system) insurance for rental properties; management services, cleaning services, annual pest control (termites are big down here) pool maintenance, lawn maintenance, etc. After I ran all the numbers I concluded that the transaction just didn't make enough economic sense for me. (Again the numbers may work better for you if you run it longer term)
:cheers:
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I have looked at it as well. I can rent a nice 3 bedroom place in my preferred locale (Passe-A-Grille Beach near St Petersburg) for 3-4K per month in the winter months. As I will only be there for 3-4 months of the year (once I retire of course), like FJAG, I have concluded that renting is the way to go. If you buy a place in Passe-A-Grille, perhaps I can be your renter!
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I have two business contacts that both own properties in Florida that they use as vacation homes for several weeks of the year and rent out for the rest.
One lives and works on Cape Cod, the other in outside NYC. They both have not so favorable opinions, and several horror stories. And both took quite a beating when the market collapsed in 2008, one of which had to set his 5 year retirement horizon back a few years (he is only now back to looking at a short horizon of less than 5 years).
These two don't have the additional issues related to non-resident alien ownership which you would have.
I would suggest finding a consultant or independent real estate investment expert who can give you a full assessment as to what you would be getting into before you make a final decision. It would be money well spent.
One lives and works on Cape Cod, the other in outside NYC. They both have not so favorable opinions, and several horror stories. And both took quite a beating when the market collapsed in 2008, one of which had to set his 5 year retirement horizon back a few years (he is only now back to looking at a short horizon of less than 5 years).
These two don't have the additional issues related to non-resident alien ownership which you would have.
I would suggest finding a consultant or independent real estate investment expert who can give you a full assessment as to what you would be getting into before you make a final decision. It would be money well spent.
