When looking for Florida investment property you must consider that there are some areas where short-term rentals are prohibited. We will help you to find a property that you are allowed to rent if this is your requirement.
Things to look out for.
• If you plan to rent your Florida property during your absence, you must buy in a 'designated short term rental area'.
• Your property advisor in Florida needs to be a licensed Realtor in order to have access to all available properties on the market through the Multi Listing Service (MLS). Once you have established that your advisor has access to the MLS there is no benefit in approaching other realtors as they cannot show you anything not available to your advisor.
• Although there is a legal requirement for everyone involved in Real Estate to be State licensed by FREC, this legislation excludes the business of letting.
• With many letting and management companies having 'come and gone" over the years, extra special care in selecting a suitable management company for your property investment is necessary.
• Many Florida Real Estate firms are affiliated to letting and/or building-development companies and therefore it is wise to establish the position at the outset of any initial property enquiry. When this does apply, impartial advice is unlikely to be forthcoming due to their vested interest.
• Many management and letting firms offer 'guaranteed rental schemes', as a marketing ploy for their property sales department, in order to attract buyers. Some letting companies have contracts with travel and/or tour operators at "lower than market" rates, thereby reducing the amount of net income from rent their clients actually receive.
• A rental guarantee is only as good as the firm that are offering it, and even when the company appears reliable, most 'rental- guarantees' can be difficult to enforce. It therefore pays to be cautious when considering any such options for your property.
• Dealing direct with a builder never saves any money, as all reputable builders prefer to work with a licensed realtor. Florida builders unlike their counterparts in the UK, never reduce their sale prices as a result of no sales agency involvement.
• New home prices in Florida are still realistic and historically property values have enjoyed a steady and gradual growth. However, despite this comforting thought we consider that it is unwise to make any property purchase solely in expectation of an annual increase in value.
Can I get a mortgage to buy my property?
If you wish to purchase a Florida property with a mortgage, then subject to qualification, it is a relatively simple matter.
• You should be able to obtain up to 80% of the purchase price or valuation (appraisal), whichever is the lower.
• Fixed and/or variable rate loans of up to 30 years are normally available, regardless of age.
You will need to provide the lender with a list of certain documentation, as proof of your ability to repay the loan on your property. Normally the best available rates are readily obtained by supplying the maximum documentation. We recommend that you take the documents with you during your visit, subject to you not having already supplied the information during pre-qualification by a suitable lender.
Employed
A minimum of 2 years Inland Revenue P60s, plus copies of tax returns, if available and your most recent pay slips, covering the prior 30 days.
Self-Employed
A minimum of 2 years accounts, plus a letter from your accountant confirming Inland Revenue approval.
Non-status loans are available to buy property, although documentation similar to the above is still required. As the loan is based on the strength of the asset, no income verification is needed.
• The maximum percentage of these loans can vary from time to time although normally they are available up to 75% of the purchase price, subject to satisfactory appraisal.
• US lenders offer a variety of flexible mortgages, which can be tailored to particular needs. Interest rates vary just like they do elsewhere in the world. You can choose between a variable and a fixed loan, although the most popular with overseas buyers is a loan that is capped on an annual basis, in intervals over the life of the loan. These are more commonly known as ARMS and they are normally available with capping options at 1, 3, 5 or 7 years.
The purpose of the capping is to control the interest rate within a specified percentage range providing peace of mind when on a budget. The fixed rate loans can normally be repaid over 15, 20 or 30 year terms.
• U.S. loans normally cover the repayment of principal property taxes, interest and hazard insurance. Unlike in the U.K. most do not carry any pre-payment penalties. Should you decide to make additional payments each year, you can reduce your term substantially and this is well worth consideration.