[Stan and Olga]

Hi everyine, we live in UK at the moment. We are planning on buying a condo in Florida. Could you please recommend what is the best area/city to buy? and where is easier to rent it out?... Also what would you recommend to pay attention to? what kind of hidden fees there might be? what are the average maintenance fees in condos... just any information would be really useful :-)
Thank you very much

Regards,
Stan and Olga

[rusty78]

The problem with having a second home in Florida is that they tax the POOP out of non-resident owners...my neighbor had a townhouse in Fort Lauderdale which they bought in 1990 as a second home and used it exclusively as a vacation home for themselves and their family...their next door neighbor in Fort Lauderdale bought the same exact house three years later...when my neighbor sold their taxes were $7,600 a year...while their neighbor's taxes, who bought three years later, were only $1,800 a year. So before you buy...check out the tax situation and make sure you still want to buy...

[beachmouse]

Only about 1-3% of condo owners break even or turn a slight profit on short term rental property. Management company fees can run 25% to 40% alone on your rentals even before you get into the tax and maitenance fee issues on the post-hurricane special assessments. (which can run $25K or more)

Buy a condo here if there's a place you love enough that you could see yourself spending 3-4 weeks on holiday there every year, or if business will regularly take you to that city. And then consider any rental income you get to be a subsidy to help pay for holidays in a spot you adore.

You're also not going to make money on appreciation any time soon in these parts. The condo market remains saturated, and the lending standards for condo financing are a lot stricter than they used to be. (even if you're a cash buyer, it's a huge indirect issue there)

[Retiredcoach]

Right now, even with the reduced purchase prices of many homes in Florida, it is cost prohibitive to purchase a condo for investment/vacation home purposes. There are just too many hidden costs and taxes that will create a true money pit for even the most savvy investor. There is an excellent website created by a Florida realtor in Cocoa Beach that might give you a truer perspective of what your costs per revenue might be. I am not sure if I am allowed by City Forum to post the website, but if you PM me, I would be happy to forward it to you.

[TriMT7]

If you are buying in cash, you can get great deals right now, and yes, make a SMALL profit per month. For example (and not saying you should buy here because there is probably much better), you can find foreclosed condos in downtown West Palm that rent for about 1k+ per month, almost waterfront, and are being sold at sub 100k. Even IF there was a ridiculous HOA of 500/month, taxes, etc., you will still break even or make a small profit.

[Stan and Olga]

Thanks to everyone... We are planing to pay cash for property. The situation with taxes sounds really scary though... Thanks for your advices... It will definitely be more difficult, as we thought that might be... It is a bit easier over here,in UK, but at the same time prices are much higher...

[TriMT7]

Budget at least 2X assessed value per year for property taxes. The good thing is that because condo prices are so depressed right now, the assessed value should be very close to what you actually pay for the property. Therefore, say you find a condo at 150k, figure 3k in taxes per year.

Before making the leap, talk to an experienced person in FL real estate that will tell you ALL costs to consider. If you get a condo with low condo association fees it will make everything much more pleasant.

[tallrick]

DO not do it, you will be sorry. Prices are still too high, and the taxes and insurance along with HOA fees will eat you alive. Please, do not invest here as foreign investment in Florida is something that benefits nobody, only causes problems. A major hurricane is going to affect us in the next few years unlike the UK where such disasters never happen.

[Drive On]

The best area is around Disney. We own a 3 BR 2BA unit there and its rented for the Christmas -New Years season and also to some Brits for Jan-Feb-Mar which helps pay the rent. Let's face it. Disney is the big attraction here. Nothing else would exist if it wasn't for Disney.

Don't think you are going to cover all your mortgage and expenses because you won't. But every little bit helps.

Your management company means a lot. We fired our previous company because they were too expensive and were doing nothing. We have a much better outfit now run by a Brit and they are much better. They handle our hotel license, cleaning, county hotel taxes etc. I don't allow pets or college student on Spring Break. Too rowdy and careless. Disney attracts families and grandparent type people who take better care of the place.

It helps to do your own advertising as well as that done by the management company. Beware of anyone guaranteeing you a certain income per year. And don't think you can flip it after a while and make money. There is too much inventory out there to compete with. Buy something you will enjoy using yourself and consider any income as a nice extra.

The best part is that you can purchase units dirt cheap. A 2 BR unit originally sold for $225,000 at my place and are now advertised for $65,000 to $70,000 asking price. If I can grab a 4 BR unit in my complex I will. A $300,000 house near a friend in Winter Haven just sold for $150,000.

[FertilityDoc]

We bought a condo in Florida 2 years ago. Why? The real estate downturn was in full swing and just a couple years prior to that I felt we were priced out of the market. We bought at almost 40% off from the peak of the market in our building. Prices did decline another 10-15% before what appears to be current bottoming out.

You have to look at your reasons for wanting a condo. For me it is a hedge against future price increases. My hope was to spend the winters in Florida in about 10 years when I retire. It helps you to stay more physically active and healthy. We wanted to be on the ocean for those long leisurely walks. It is also a pleasure getting on the plane with magazines in hand but no luggage in tow. Everything you need is waiting in the condo.

Having said all that, this is a decision that you make with your heart and not your financial head. Take $5000 a year in taxes, $1000 in property insurance and $500 per month in HOA fees. Keeping the unit updated and budgeting for repairs are additional costs. Then there are the HOA assessments when repairs are needed. In your case, airfares across the pond will add up. Throw in the lost opportunity for investment and it is an expensive proposition. Many condo associations also have restrictions on a minimal length of time for rentals. This can can be as long as 1 year.

When I add this all up, we could be staying in a Ritz Carlton or Four Seasons for the amount of time we spend in the Condo. Do I still love it? Yes.... Still, I would recommend that you have a high degree of disposable income and critically look at the finances.