investing in florida

[IanFriesen]

We are looking at purchasing a few investment properties in central florida. I am looking for some tips and/or addvice from anyone who has or is curently investing in florida. Maybe shed some light on any pit falls that we may encounter.
Thx

 

[GaryMcGowan]

Why? If you listen to Don and some of the other speakers they are still saying wait. The worst of the mortgage crisis is not over. Prices are still set to fall even further.
If you want to pick up a good book on the realities of it. Lookup Philip McKernan`s new book South of 49: The Canadian Guide to Buying Residential Real Estate in the United States.

 

[ScottL]

South of 49 is a good read.

I am in Florida (Orlando area) right now. Today I toured :

A 2900 sq. ft. brand new 2 storey home with jacuzzi and pool; all for $155,000.

2 beautiful newer condo`s, 3 bedroom, pool, games rooms, furnished. $70,000 each.

These were not short sales just bank owned.

I project a 2.5% CAP rate and a free vacation. A few headaches and some currency uncertainty. Not sure if Florida is for me right now...Also today there was a hurricane 30 minutes away and severe storm watch !

Some say the market is bottomed out in Florida. Others project a 20% or more drop in prices still this year. One thing I can tell you is that there is no shortage of inventory around here right now and no shortage in sight.

Good luck !

Scott

 

[MikeMcCrae]

I have heard rumours of very high property taxes for non resident owners in Florida. Please be careful.

 

[IanFriesen]

QUOTE (MikeMcCrae @ Mar 12 2010, 02:49 AM) I have heard rumours of very high property taxes for non resident owners in Florida. Please be careful.


Thank you for the heads up. I hear this a lot but i`m unable to find any facts to support it. Can you tell me the sorce of your info?

 

[bizaro86]

QUOTE (IanFriesen @ Mar 12 2010, 10:52 AM) Thank you for the heads up. I hear this a lot but i`m unable to find any facts to support it. Can you tell me the sorce of your info?


My understanding is that the mill rates for Florida property taxes are the same for everyone, but someone who has a primary residence gets a 50,000 reduction in the adjusted tax base.

So someone buying a 70,000 condo as above would pay taxes on 70k as an investor, whereas a homeowner living in that condo would pay tax on only 20,000 of value.

See here for an example.
http://brokerdave.topproducerwebsite.com/property-taxes.asp


Michael

 

[IanFriesen]

QUOTE (bizaro86 @ Mar 12 2010, 12:00 PM) My understanding is that the mill rates for Florida property taxes are the same for everyone, but someone who has a primary residence gets a 50,000 reduction in the adjusted tax base.

So someone buying a 70,000 condo as above would pay taxes on 70k as an investor, whereas a homeowner living in that condo would pay tax on only 20,000 of value.

See here for an example.
http://brokerdave.topproducerwebsite.com/property-taxes.asp


Michael

I have found that in my research as well. Canadian investors dont pay more we just dont qualify for the discounts that some florida residents get.

 

[bizaro86]

QUOTE (IanFriesen @ Mar 12 2010, 12:55 PM) I have found that in my research as well. Canadian investors dont pay more we just dont qualify for the discounts that some florida residents get.

I`d be a bit more negative about it than that. If all the permanent residents (you know, the kind who actually use the schools and what not) pay taxes on a lower assessed value, the mill rates will have to rise to raise the same level of income for the government.

Also, those same people paying taxes on the lower values are the ones who vote, whereas non-residents do not, so I would expect that the situation will get gradually worse over time.

Michael

 

[RCC]

I hear thagt insurance could be very expensive also.

 

[Rickson9]

QUOTE (MikeMcCrae @ Mar 12 2010, 04:49 AM) I have heard rumours of very high property taxes for non resident owners in Florida. Please be careful.

This isn`t true. Read about the homestead tax. Property taxes are high compared to what residents of Florida pay. If you are Canadian and pay property tax here, it won`t be any different.

 

[Rickson9]

QUOTE (RCC @ Mar 12 2010, 06:50 PM) I hear thagt insurance could be very expensive also.

Depends. Insurance can be high in Canada too.

 

[invst4profit]

Insurance can be high. My father in law had a 2 bed bungalow on the gulf side and insurance was close to $5000/year. Also when he sold legal, real estate fees and taxes ate up nearly 40% of the sale price.

 

[bizaro86]

QUOTE (invst4profit @ Mar 13 2010, 02:56 PM) Insurance can be high. My father in law had a 2 bed bungalow on the gulf side and insurance was close to $5000/year. Also when he sold legal, real estate fees and taxes ate up nearly 40% of the sale price.

If it were me, I would get quotes on insurance and taxes, and all the other expense normally associated with owning a rental property, ie property management. Then I`d take those estimates and assume that my costs would be higher than that. And if the property still worked as an investment with extremely conservative assumptions (likely greater than 50% of rent for expenses!) I`d proceed.

Michael

 

[wgraham]

QUOTE (IanFriesen @ Mar 11 2010, 04:32 PM) We are looking at purchasing a few investment properties in central florida. I am looking for some tips and/or addvice from anyone who has or is curently investing in florida. Maybe shed some light on any pit falls that we may encounter.
Thx

If you haven`t already please read "South of 49" by Phil Mckernan (does anyone else think of Pirates of The Caribbean when you say Phil`s name

) In my mind this book is a must read for novice and senior investors who are looking to place money in the US. The tax section alone is worth it.
Here is a link to Phil`s book!


Good luck and happy investing!