Many people buy a second home in the United States; for example, for Brits looking for overseas property, this is the most popular destination after Spain, and most of them shop in Florida.
Some analysts are predicting that the Florida property collapse is coming to an end, and prices are close to the ground, so now may be the perfect time to invest.
Steps
Step 1. Consider the reasons for buying a Florida property
Among the attractions, the climate, the favorable exchange rate and the availability of flights (and affordable travel) from most European airports. Few buyers seem put off by the length of the journey, which takes at least eight hours from London, but this varies depending on your departure and arrival points. As the US economy has recently slipped into recession and the long-standing property boom has come to an end, many developers in Florida have found themselves facing harsh conditions in the market within which to promote their projects. A consequence of this is that many intrepid buyers from other countries have been able to get great discounts on new properties. Another is the exchange rate between the US dollar and the euro or pound, which means that Europeans are much more advantaged when it comes to buying.
Step 2. Consider popular resorts in Florida
This guide gives you a glimpse of the areas of the state most popular with second home buyers there: the central region around Orlando, the east (Atlantic) coast, and the southwest coast (gulf) resorts.
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Central Florida. The central part of the state, particularly near Tampa and Orlando, has long been a favorite of visitors, especially families, as this is where most of the major attractions are located, including Disney World, Universal Studios, the Busch Gardens and Sea World. Contrary to some other areas of the region, it is warm all year round and it rains less than in coastal areas.
Its popularity, and the resulting buoyant rental market, which offers homeowners the best returns on investment in Florida, makes the area a magnet for both those looking to buy a second thing and investors who buy for. then rent or resell. Prices reflect all of this, but generally still offer a good advantage, as the volume of new builds helps keep them competitive. Most buyers are looking for detached villas with swimming pools
- The Gulf Coast. In July and August, it's not as affordable as the previous destination, and neither is the potential to rent or resell properties, especially to families. However, it makes up for these disadvantages thanks to the magnificent white beaches, blue sea, abundant moorings and elegant restaurants, attributes that have made it popular with the super rich. About 60% of the wealthiest US citizens spend the winter in Naples, an exclusive establishment on the Gulf Coast, or in Palm Beach, on the Atlantic Coast. Consequently, the Gulf Coast is an incredibly expensive area. Waterfront homes, in particular, have prices that easily double those of similar-sized properties in the Orlando area. The houses present towards the hinterland or near the coast are slightly cheaper.
- The Atlantic coast. Florida's Atlantic Coast stretches from St. Augustine to Key West, passing through Daytona Beach, Fort Lauderdale, Miami and the Florida Keys. It includes some of the most popular (and expensive) locations in North America. However, not all places on the Atlantic coast are expensive and, if you choose your destination carefully, you can find a house with three bedrooms and a swimming pool for approximately 250,000 dollars (around 186,000 euros).
- An apartment in a good area of Miami will cost around $ 300,000 (about € 223,000), not bad considering everything the city has to offer: beautiful beaches, blue seas, a non-stop nightlife, an art scene. cultural heritage, fascinating Art Deco architecture and a perpetually warm climate. Many current buyers are taking advantage of the stressful situation of builders involved with Miami condo projects to get some of the best discounts available in the international real estate industry.
Step 3. Buy a Florida property
The purchasing system of state houses is decidedly different from that of Italy or other European countries and presents various pitfalls for those who are not familiar, therefore appropriate professional guidance is essential.
In Florida, nearly every property for sale is listed on a central database available to all realtors (called "realtors" in the United States), so there is no need to visit them one by one. They tend to work as agents of the seller or the buyer. It is wise to consult a buyer's agent who is experienced in working with foreign investors
Step 4. Cover the costs
To cover legal fees, costs of certifying that the property belongs to you, notary fees, expenses for insurance premiums, transfer fees, property taxes, and costs of taking out the mortgage (if necessary), you should calculate about 5% of the purchase price.
Step 5. Understand the purchase process
Once a price agreement is reached, the buyer pays a small starter deposit before making a formal offer through a purchase contract. Once the contract is signed, it is binding, although there may be clauses that allow both parties to back out in defined circumstances. Then, a 10% deposit is paid, paid to an escrow account. An insurance company evaluates state records and insures the property against third party claims. After that, the completion of the deal will take place, including the transfer of the purchase money to the escrow account.
Step 6. Time is a crucial variable in the US property purchase system
If you do not respect the dates stipulated in the contract, you risk losing your deposit.
Step 7. Get a mortgage
When thinking about how to finance the purchase of your property, consider all options. Paying in cash, as long as you can afford it, is often recommended, but you may not want to invest a relatively large amount of money this way. If, on the other hand, this alternative is for you, be sure to consult one of the specialized currency exchange companies on the market, as you can get undoubtedly better exchange rates and potentially save thousands of dollars in the process. The other option is to re-mortgage your first home or evaluate a mortgage on your Florida property through a loan that is requested in your country or the United States. The re-mortgage offers the easiest solution. Releasing the value of the mortgaged property in your country means that the second home can be bought for cash, without the need for another mortgage. However, this may only be feasible for those who already own their first home entirely.
Several mortgage providers in the UK, for example, lend funds up to 80% of the purchase price of the second home over a period of typically 15 years
Step 8. Get a mortgage in Florida
If you decide to get financing in the United States, keep in mind that most mortgages available to foreigners require a minimum prepayment of 20%. Some may even predict 30% or 35%.
- Early in the process, make sure you get what's called a Good Faith Estimate. It is a standardized document used to have in detail all the costs deriving from the mortgage, including monthly payments and those paid in one go.
- If possible, try to insure a self-certified mortgage. Contrary to other countries, this type of mortgage does not necessarily have a higher interest rate than a fully documented mortgage, and could save you a lot of time and hassle from putting the documents together.
Step 9. Understand the tax system
The US taxation system is complex and may involve payments to at least four different levels of government: local, regional, state and federal. The Double Taxation Treaty prevents double payment of taxes.
- Income tax, a progressive tax ranging from 0 to 35% of taxable income, forms the bulk of the taxes collected by the US government.
- Florida is in a low position relative to other US states in terms of the tax burden it imposes. It is one of only nine states that does not impose a personal income tax. More than half of its non-federal income is collected locally, mostly through property taxes, which, for homeowners, amount to approximately 1.5% annually on the value of the property.
- All income generated from a rental is subject to taxation in Florida, and this is charged on a sliding scale (currently 15-34%), depending on the sum. Intangible personal property (which includes stocks, bonds, mutual funds, and so on) is also taxed.
- Florida's sales and consumption taxes provide more than half of the state's revenue. Sales tax applies to most items sold at retail (excluding groceries, medicines and certain other items), as well as car rentals, hotel rooms and theater tickets. The rate is currently 6%. Local governments may impose additional local sales taxes of up to 1.5%. Consumption tax is levied on all items brought to Florida for sale.
Step 10. Obtain passports, residence permits and other residency documents
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Passports and residence permits. European citizens can visit the United States for business or pleasure without a residence permit for up to 90 days per year. Passport is mandatory. The traditional Visa Waiver program, which works for most European citizens and allows you to stay in the US for up to 90 days without a visa, was changed in January 2009. After this date, all travelers wishing to re-enter the Visa Waiver Program must register online before traveling to the United States.
This should preferably be done at least 72 hours in advance and is intended to have an extra layer of security for the US authorities. The online registration will be valid for a maximum of two years. This system is called Electronic System for Travel Authorization and is similar to the Electronic Travel Authority operating in Australia. The ESTA is also valid for multiple entries in the United States, therefore, for those who own a property, it is possible to complete the online registration once and then travel for two years without problems under the Visa Waiver
- Those who would like to stay between 90 days and six months should have a B2 visa. In order to obtain this, applicants must prove that they have enough funds to support themselves during their stay.
Step 11. Residence
Florida's migration laws are strictly enforced. Those who want a Florida Green Card, which allows them to live and work in the state, face a detailed scrutiny done by the Immigration and Naturalization Service, especially if they want to start a business
Step 12. Those who do not intend to work, including retirees, must also be able to demonstrate that they have substantial means
This can be a stumbling block for many people who dream of retiring in Florida.
Advice
- US hospitals provide some of the most advanced health services in the world. Most are private.
- The United States spends about 13% of GDP on health care, much of it through employer-provided insurance schemes and the two federal schemes, Medicare and Medicaid. There is no national health service. It is estimated that around 14% of the population does not have any form of health insurance. For visitors, private medical insurance or travel insurance is essential. If you get seriously injured, the emergency services will treat you and make you pay later. If the injury is not serious and you need to see a doctor, a basic visit will cost you around $ 100 (around € 74). There is a variety of policies available for overseas travelers and those intending to live in the US, which are not disproportionate in cost.
- While there are no restrictions for foreigners to buy property in Florida or anywhere else in the US, there are limits on how long they can stay in the country annually (read the section on passports, residence permits and residency). Many areas of Florida impose restrictions on the number of days owners can rent their home annually. Some prohibit rent directly, so if you expect your Florida property to pay for itself through rent, it is crucial that you inform yourself about the situation as soon as possible.
- Individual circumstances will change widely, so it is imperative to get professional advice and guidance tailored to your particular situation, especially in areas of property purchase, potential returns on investment, taxation and mortgages.
Warnings
- This is a guide only. You should always opt for professional assistance when buying any type of property.
- Buying a home overseas is a bigger decision and shouldn't be taken lightly. It is vital to make sure that you do a thorough research on all factors and that you have all the relevant data.
