Here are some frequently asked questions:
1. How easy is it to purchase property in Florida?
2. Is it difficult to obtain a mortgage
3. How much deposit do I require?
4. Is there any other costs in addition to the purchase price?
5. Is there any rental restrictions in Florida
6. How many weeks do I need to rent my home out to cover the running costs
7. What standards should I furnish the home to?
8. Do I need to use a lawyer during the purchase process?
9. What are the tax implications of owning property in Florida?
10. I would like to book an inspection visit with your company-how much notice do I need to give you?
How easy is it to purchase property in Florida?
It is very easy to purchase property in Florida.
The Florida Authorities are very positive in assisting investors to purchase there,
so there are few restrictions! The only restrictions would be if you had a criminal record
or you were not able to account for the origin of the funds going into the purchase.
After that the usual underwriting requirements apply.
Is it difficult to obtain a mortgage
Yes it is easy getting a mortgage there subject to the usual underwriting requirements,
such as the deposit required and verification of income and appraisal/valuation of the property.
Overseas Investors are known in the mortgage market there as “Foreign Nationals”
or abbreviated in loan jargon as “FN loans”. As above certain extra conditions are imposed
for the FN investor. The larger deposit and proof of 6 months repayment in their U.S.
bank account and proof of origin of the funds going to the purchase.
How much deposit do I require?
The normal deposit required is 20% However in recent times due to the financial crises
a 30% deposit may be required if you are an “Overseas Investor” The overseas
investor may also need to show 6 months of loan repayments in their U.S.
bank account if they are using a U.S. bank to finance the transaction.
Again the overseas investor will have to have a U.S.
Bank account established. We at Florida Property Direct can arrange setting
up a bank account on your behalf.
Is there any other costs in addition to the purchase price?
Yes there are other costs that you may not be informed of by Agents who are
not licensed Realtors or Brokers.There are closing costs in every property
purchase there. However the larger closing costs are incurred
if you are drawing down a loan in the U.S. to buy the property.
This is due to loan origination costs from the lender and also State “Document Stamp” tax.
This is a form of Stamp duty that goes to the state on the size of the Purchase price.
Also there is a further charge on the loan you may be drawing down this is known as the “Note Stamp”
There is a further tax on “new loans” on property called Intangible tax.
However to summarize these extra closing costs can mount up to approximately 2%
of the purchase price of the property!
Please note these costs are only incurred if you are getting
finance in the U.S. to purchase there.
A cash buyer or an investor who may be using finance from outside the U.S.
will have very reduced closing costs and will not incur these tax charges.
We at Florida Property Direct have our own licensed Broker to discuss
and guide you through the process and we make the whole transaction
a very transparent and hassle free experience.
Is there any rental restrictions in Florida?
Yes again a Licensed Broker/Realtor will know the rental zoning in the various areas.
We will be able to obtain a property for you in either a “long term rental location”
or a “short term rental location”.
The Overseas Investor may wish to buy a property to rent in the Orlando area near Disney
where a short term rental property would be the most sought after for Tourists on vacation.
These properties are mostly zoned “short term” to facilitate rental periods on a nightly basis
right up to 1 or 2 or 3 week rental periods.
Other investors may wish to purchase a Coastal property to rent out, however here you
have to be more cautious as the zoning can be different in these areas due to the demand
for “long term” rental by the domestic market. The U.S. residents tend to move down
during the winter months to Florida and sometimes may stay for a few months in those areas.
There are properties available with short term rental on the coast; however we will do the
research on your behalf and advise of what rental zoning is in the area you desire.
How many weeks do I need to rent my home out to cover the running costs?
This is not a definite science and we can only make estimates, however our years
of studying the markets gives us the edge over other companies.
Properties in good vacation locations will rent better than others and we
can supply you with rental guide figures.
We have to factor in as to whether you have a loan commitment on your rental
property and the size of the loan etc. We will factor in all the costs of running
your property and supply a good faith estimate which will give you a clear
picture of your rental income.
Please beware of companies offering “guaranteed rental” as these rental figures tend
to be incorporated in the purchase price of the property and could cause you problems
when you wish to sell on as the valuation / appraisal may not hold up.
A tip to remember is where there is guaranteed rentals offered we suggest that
you should get an independent valuation of the property before purchse.
What standards should I furnish the home to?
The market demands a high standard of furnishings in your property.
The villas etc are competing with top class hotels with good amenities.
A typical high quality furniture pack can be purchased for approx $20,000.
This is a turn key furniture pack that includes furniture, bed clothes, curtains,
Kitchen utensils, plates and pictures etc, and leaves the house ready for living or rental.
This is a typical cost, however if you purchase a very large house or
just a 1 bed apartment this figure will have to be adjusted up or down to represent the property concerned.
We have furniture packs available at verycompetitive rates for whatever property you are
considering and our interior consultant will assist you with the appropriate furnishing plan.
Do I need to use a lawyer during the purchase process?
No, it is not required that you use a lawyer when purchasing a property if you are using a
licensed Broker or Realtor.They can guide you through the purchase transaction and are
trained to represent you through to completion free of charge.
There are times where there may be a legal query and our licensed Broker can consult
the Real Estate legal department on your behalf also free of charge.
On the rare occasion where the legal problem can not be resolved we have Real Estate
Attorney’s who will assist you and resolve the issue.
What are the tax implications of owning property in Florida?
The tax issues of owning a property in Florida are that your priority is to the IRS.
However if you are an overseas investor this is still the case, but you may still have a
taxation issue within your own taxation area.
We have taxation experts available to discuss individual taxation
requirements as we find that with a lot of overseas investors will have
different requirements depending on their particular circunstances.
I would like to book an inspection visit with your company-how much notice do I need to give you?
We hold regular inspection trips to view properties in Florida and we advise you to
give us as much notice as possible so we can organize a convenient flight and accommodation if necessary.
We publish forthcoming inspection trip dates on our web site for convenience and we will refund the
reasonable flight costs to you if you purchase a property through our Real Estate Company.
