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Buying a villa in Florida?
Seriously thinking about buying a villa in Florida? In the process
of buying a villa in Florida?
Looking for advice on how
to go about it?
If you have answered yes to one or more of the above
then we can help.
If you are already in the process of
buying a villa in Florida
then some of the information and advice we can give potential purchasers
will be 'a bit late in the day'. However, that said, the information
can still be used to anticipate and make preparations to overcome
potential future problems.
For all others, the information and advice
that we can give you BEFORE you even start looking for a villa or condo,
will be invaluable.
Villa Property Companies
In most major villa
holiday magazines you will see adverts and at overseas property
exhibitions you will see and meet many of the above. They
WANT you to buy and will paint you a rosy picture - after all this
is how they make their money. Once you have committed to
purchasing there is no going back - well not without financial
loss. If you need to rent out your property to finance its
purchase, whether you succeed or fail at this is not of concern to
them - once you have bought your villa they will have made their
money (from a realtor commission) and you will be left to get on
with it. Beforehand they will have introduced you to a
mortgage broker or financial consultant (more commission).
Post purchase, some MAY introduce you to tax accountants (you will
have to submit an annual tax return to the US Inland Revenue
Services) provide an introduction to a property management company
(more commission) - or they may have their own (another way to
make money from you).
Be extremely wary of promises of
guaranteed bookings. Take the recent events of 9/11. Villa
owners saw drastic declines in bookings following this atrocity. No
one knows the future. The only way to receive a guaranteed number of
weeks bookings is by 'selling' weeks to large tour operators. You
will know from your own experience of using tour operators that they try
and keep costs to a minimum to make the 'package' attractive to the
traveller. To enable them to do this they have to purchase the
various elements at a vastly reduced cost. This means purchasing
your rental weeks at a vastly reduced cost! The income you will
receive will probably barely cover your mortgage payments (assuming
you have a mortgage and not bought the villa outright) let alone cover
your management company fees and the property running costs (e.g.
utilities, air conditioning maintenance, garden maintenance, irrigation
maintenance, home owner association fees, pool maintenance, interior and
exterior pest control, telephone, cable TV etc. to name but some).
Utility costs are not cheap - electricity and water in Florida are both
extremely expensive.
Renting Out Your Florida Villa
This consideration should form a key part of
your decision BEFORE you purchase - assuming this is how you intend to
finance your purchase. How are you going to position your business
in the marketplace? Who are your potential customers?
How are you going to segment your market and how are you going to target
them? What budget will you have to do this? How much can
you afford? How are you going to maximise this expenditure - i.e.
get 'bangs for bucks'?
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