Please note that all our advice is totally FREE.  We act as an intermediary between you and our real estate agent in Florida and clear the path to make buying your dream home as relaxing and effortless as possible.  

First steps

Before my wife, Sue and I became villa owners in Florida, we spent many months investigating if and where we should buy an investment property in the Sunshine State. Should the villa have a pool and / or spa, should it be close to Disney, how many bedrooms and bathrooms should it have.  How will I obtain a mortgage and what type of mortgage is best.  These are just a small sample of the many questions that you will need answered before taking that final step of buying your dream vacation home.

Florida is extremely well known for its large and beautifully designed properties, year round sunshine, many attractions, exquisite beaches and inexpensive lifestyle. We wanted a holiday home that we could enjoy with our young family and also rent out to help cover the cost of the mortgage. Finally, after many months of trawling the internet speaking to various property companies and existing villa owners we were ready to purchase our very own dream villa.  We needed to select a good development area, choose our own plot and decide on the style of the property to be built.  We eventually decided on a single storey home in Kissimmee.  Once it was completed, it was everything we dreamed it would be. One thing I can say with absolute conviction is that my wife and I are glad we took the plunge and have absolutely no regrets about buying in Florida.  A couple of years later, we took the plunge again and purchased another home, this time in Davenport.

You have already taken the first step toward purchasing your home by visiting our web-site. Our aim is to advise you on the buying process step by step. We promise to give you an honest and totally un-biased view from the perspective of already having bought villas ourselves in Florida. Though buying a property in Florida is relatively uncomplicated we still hear many stories of people who have had problems in one way or another. We are here to help first time buyers avoid any pitfalls and ensure your villa purchase runs as smoothly as possible.

Please don't forget that the experience of buying your Florida dream home should be pleasurable and exciting.  From visiting the various developments, choosing the plot and house that is right for you to finally making the purchase, we are here every step of the way to help make your dreams come true.

For further advice and guidance, please visit other areas of our web-site as follows:  Buy A Dream Villa, Mortgages, Management Companies and Tax Advice.

Buy A Dream Villa

Location, location, location

The next step to buying your home requires some ground work to be done by yourself prior to arriving in Florida.  Firstly decide where you want to buy. Do you want the villa to be close to Orlando's many theme and water park attractions or do you prefer to be near the beaches? If you prefer the beaches, do you prefer the Gulf Coast (more expensive) or the Atlantic Coast.  Whichever you decide, as with all investment properties location is very important. Once you have decided on your location, you must decide the type of property, the number of bedrooms, bathrooms, pool, etc. Do you want to be on a small development or larger resort development, do you want a gated or non gated community.

And last but not least what is your budget.

Once you have narrowed your options, we can provide you with the latest information on the developments which are of most interest and likely to suit your needs.

Do You Need To Rent Your Property ?

This is a very important question as it will determine where you can buy. Only certain communities in Orlando are zoned for STR (Short Term Rental).  Please do not accept any verbal guarantees from any salesperson regarding STR without checking in the covenants and restrictions of the developer.

One of the most important decisions you will make is choosing the development which suits your needs best. Remember not all developments allow short term rental and if you intend to rent your property this is the single most important item you must consider.

Remember the developers' agent is acting on behalf of the builder, and is bound by law to obtain the best possible deal for the builder, not for you. Some builders and management companies offer guaranteed rental programs. These include a minimum income for an agreed period (usually 12 months) or alternatively, a minimum number of weeks booked for the year. What you are not told however is what the income will be for those weeks or what the agent will rent your property out for (for example, you may receive £400 per week but the agent is renting it out for £500 per week).

We strongly advise that if you decide not to secure rentals for the property yourself, then you thoroughly investigate any proposals presented to you from Management Companies / Letting Agents.

Our advice is that if you have the time, you market the villa yourself. This allows you to maximise your income and makes it easier to reach that magical break even point of income versus expenditure. If we are being honest this can be quite time consuming but well worth the effort when the bookings start to come in. If you go down this route you will have to consider the costs involved in marketing your villa. Costs could include newspaper / magazine advertising, creating your own website, listing your villa on other websites and other incidentals like business cards, flyers etc.
 

Inspection Trips

We would highly recommend you look at the possibility of an inspection trip.  This can be purely for the purpose of choosing your dream home or can be combined with a holiday / vacation.

While there are benefits to both scenarios if you have limited time available and are there, purely with the inspection of properties in mind, then you are more focussed on the job in hand. However, we would recommend an absolute minimum of 4 days for an inspection visit. You will need to meet up with the Realtor to view several villas and communities, spend a sleepless night(s) deciding on which property to purchase, sign contracts with the builders, pay the deposit, choose the colour of the house etc.  Decide on the shape and size of the pool and type of pool tiles, open a bank account and look at some of the furniture packages that are available. A very hectic but rewarding few days.

Alternatively If you can spare more time, it will give you extra opportunities to view a few more developments over a longer period, then take a few days to contemplate and narrow your choice down to a couple of villas before finally viewing your favourites again.

You will also have more time to investigate the local area and amenities such as shops, restaurants, banks and supermarkets to satisfy yourself the area has what you and your guests will be happy with.

Its now time to make your final decision. Should you buy a new home or a resale.

Should you decide to have your dream home newly built, you will then sign a contract with your chosen builder, leave your deposit and if you haven't already done so open a bank account and arrange a mortgage quotation.

If you decide to purchase a resale home, then under Florida law, all that is required for a legally binding sales contract is a signed written agreement plus goodfaith deposit. It is therefore possible to 'Exchange Contracts 'straight away with a Seller and virtually eliminate any possibility of your chosen property being sold elsewhere. Most written Sales contracts are conditional and you will have ample time to arrange financing, survey the property and approve legal work. If your loan is denied or the house does not pass inspection, you may withdraw without penalty. There can be any number of conditions in the contract but essentially all elements of the sale should be in writing to avoid dispute.

We would highly recommend that you use the services of a state registered realtor whether you are buying new or resale. In the U.K. we use estate agents who are normally employed by the house owner to find a buyer for their property. They then work with both the buyer and seller to agree a deal that is suitable to both. The downfall of this system is that the estate agent may withhold information about the buyer or seller which may be beneficial to the other despite the seller paying their fee. In Florida the realtor you choose can only work on your behalf and is legally bound to act in your best interest disclosing information such as - is the property worth the asking price - are there similar properties available at a better price - are there any known future developments that may affect the value of the property.

The Realtor we work with very closely has many years experience in Real Estate Sales.  She has specialised in the short term letting market for the last few years and is completely independent and is not tied to any builder, which is often not the case.

We are able to offer you the following services if required:

Provide you with honest straightforward advice on all aspect s of buying a villa before you travel to Florida.

Arrange for details of resale properties that are for sale to be sent to you prior to your trip.

Arrange for you to be driven to all the developments you have chosen to view.  Alternatively, you can drive yourself and meet our Realtor at the developments.

Advice on mortgages, taxation, advertising, payment of utility bills, accountants, management companies and where to open a bank account etc.

MORTGAGES

Many British citizens who buy a holiday home in Florida, are unsure whether to arrange a US or UK mortgage.

Most US mortgages enable you to lock into a fixed rate mortgage for up to 30 years.  In our opinion, this is the best way forward as you will always know what your monthly mortgage outgoings will be – there will not be any interest rate increases.  The only drawback is that exchange rate fluctuations will affect how many dollars you get to the £ when you transfer money over to your US bank account.  However, if you keep an eye on the rates and transfer money at the correct time, these fluctuations will not have a significant effect on your expenditure.

A UK mortgage can be arranged through one or two companies dealing with homes in Florida and usually offer variable rate mortgages closely linked to our own bank base rate – usually around 1.5% above base rate.  They do offer a fixed rate but usually for a maximum of 3 years.  The issue with this type of mortgage is that your repayments are always subject to interest rate increases – remember that if your mortgage payments increase, you cannot increase your weekly rental prices.  The upside is that your repayments are not subject to exchange rate fluctuations.

Our own mortgages are with US institutions and this is our preferred route to obtaining a mortgage.

To secure a mortgage in Florida you will be required to supply the following:

FULLY DOCUMENTED (20% Minimum deposit)
 

A. Prior years tax returns.
B. Prior years P60's.
C. Pay slips for the most recent 90 days.
D. If Self-employed, letter from Accountant showing business in good standing.
E. 3 Items of credit (which may include).
 

1) Mastercard, name of bank and credit card number (copy of statement).
2) Visa, name of bank and credit card number (copy of statement).
3) AMEX, name of bank and credit card number (copy of statement).
4) Mortgage history, copy of annual statement or letter from bank/solicitor stating that home is owned Free & Clear.

F. 2 Reference letters from Bank, Accountant, Building Society or Solicitor.
G. 3 months bank statements or building society book proving source of funds.
H. Copies of Passport also to include last US entry stamp.
I. You will have to open a United States Bank account.
J. You will require 6 months mortgage payments in your bank for reserves at closing.

FOR NON_INCOME VERIFICATION (30% deposit)

If you can afford to pay a 30% deposit, a US mortgage is available under the "No Income No Asset "scheme (NINA).  With this mortgage, very little documentation is required and the only checks that are carried out are your credit worthiness – no pay slips or building society statements are usually required.

This is the easiest route to go if possible.

MANAGEMENT

Once you have purchased your villa, whether you intend to use it for your own personal use, or for short term rental purposes, you will most definately need to employ the services of a reputable management company to look after your prize investment. In this section our aim is to advise you on the do's and don'ts of management in Florida.

Which Type Of Management Company Should I Choose ?

The simple answer to the question above is really down to individual circumstances. In Orlando there are literally hundreds of management companies offering their services to villa owners. They vary from the very large companies with hundreds of homes on their books to the small husband and wife teams with just a few homes. Our advice, is that you look into which type of Management Company suits your personal needs and aspirations for your villa, speak to at least 3 companies and make you final decision from there.  If possible obtain recommendations from current villa owners who deal with the proposed Management Company.

What Should I Expect From My Management Company ?

Lawn Maintenance - can be arranged through your management company, though some developments include lawn maintenance in their association fees. Lawn maintenance should include grass mowing, fertilization, watering and general maintenance to prevent costly damage at a later date.

Villa Cleaning and Inspection - includes the cleaning of towels, bed linen, dishes etc once your guest has vacated the villa. A thorough check of the villa for damage, where damage is found the rentors security deposit can be charged accordingly. The villa check is designed to keep your villa maintained in tip top condition for your future guests and you the villa owner.

Pool Maintenance - should include services such as cleaning of the pool, ph balancing, water chlorination and replacing pump filter.

Villa Maintenance - essential maintenance such as small stains on the carpet, marks on the walls etc. If dealt with early these wear and tear problems ensure major maintanance will be required as infrequently as possible.

Pest Control - monthly chemical treatments to both the inside and outside of your property are a must in Florida. The treatments are essential to ensure the elimination of insects from your home.

Bill Payment Facility - some Management Companies offer to pay your utilities bills from rentals monies received.  They transfer monies received from rentals into your US bank account and pay the utility bills from the same bank account.  We personally pay all our own bills directly out of our bank account and so keep complete control of all our finances.   The decision on which route you take is entirely yours.

Dealing With Licencing Issues

All villa owners who intend to rent their villa for short term rental purposes must be properly licensed with Department of Regulation, divisions of hotels and restaurants and a Florida state agency. Before the licence is issued the property will be inspected by a Florida state agency, this will cost in the region of $150 for a single family home.  Your Management Company will be able to assist in all of the items below.

The state of Florida inspection requires each home to have the following.

1. A copy of your charges for the villa must be kept at you management companies office.

2. A 2A40BC fire extinguisher to be installed.

3. A smoke alarm system in all living areas including bedrooms and living rooms all alarms must be interlinked.

4. An additional smoke alarm for the hard of hearing.

5. All exterior doors must have a double locking system fitted.

Should you have any queries on management please do not hesitate to get in touch with us.

Taxes

In addition to the property taxes that every homeowner has to pay, an additional tax based on the gross rents received must be collected for any rentals of 180 days or less. This tax is made up of:

1. A 5-6% Tourist Development or Resort Tax
2. A 6-7% State of Florida Sales Tax.

Therefore, a total of around 11% to 13% of gross rentals received is to be paid in State and County Taxes.  Normally these taxes are charged on top of the rents and paid by the tenants - much the same as would take place with a hotel or motel.   However, for our homes, we include the taxes within the price we quote so that the potential guest does not receive any nasty surprises when the final rental cost is calculated.

Taxes that are collected from rental income must be submitted to the appropriate agencies on a monthly basis by the 20^th of the following month, in compliance with the law. In other words, rental income received in August must be paid by the 20^th of September.  By paying these taxes, you are assured that you are properly registered for State and County Tax.  It is the responsibility of the owner to declare the rental income achieved on Owner Bookings and to pay the relevant tourist tax. If your Management Company has made bookings on your behalf and taken the rental income, then it is their responsibility to ensure all taxes are paid to the relevant authorities.  However, you need to check this happens as any default on payment is YOUR responsibility.  For this reason, my wife and I pay all taxes for our properties – once again enabling us to keep strict control of our finances.