Very Important Tips to Help You Decide Whether You Should Buy a Florida Private Rental Villa

Listed below are some very helpful andchosen builder, leave your deposit and if you
extremely important tips if you are consideringhaven't already done so open a bank account and
purchasing a Florida private rental villa or Disneyarrange a mortgage quotation.
rental house.If you decide to purchase a resale home, then
Before my wife and I became Florida villa owners,under Florida law, all that is required for a legally
we spent many months investigating if and wherebinding sales contract is a signed written
we should buy an investment property. Shouldagreement plus good faith deposit. It is therefore
the villa have a pool and / or spa, should it bepossible to 'Exchange Contracts' straight away
close to Disney World, how many bedrooms andwith a Seller and virtually eliminate any possibility
bathrooms should it have ? How will I obtain aof your chosen property being sold elsewhere.
mortgage and what type of mortgage is best?Most written Sales contracts are conditional and
These are just a small sample of the manyyou will have ample time to arrange financing,
questions that you will need answered beforesurvey the property and approve legal work. If
taking that final step of buying your dream Floridayour loan is denied or the house does not pass
villa.inspection, you may withdraw without penalty.
Florida is extremely well known for its large andThere can be any number of conditions in the
beautifully designed properties, year roundcontract but essentially all elements of the sale
sunshine, many attractions, exquisite beaches andshould be in writing to avoid dispute.
inexpensive lifestyle. We wanted a holiday homeWe would highly recommend that you use the
that we could enjoy with our family and also rentservices of a state registered realtor whether
out to help cover the cost of the mortgage.you are buying new or resale. In the U.K. we use
After many months of trawling the internet,estate agents who are normally employed by the
speaking to various property companies andhouse owner to find a buyer for their property.
existing Florida villa owners we were ready toThey then work with both the buyer and seller to
purchase our very own Disney World rentalagree a deal that is suitable to both. The downfall
home. We needed to select a good developmentof this system is that the estate agent may
area, choose our own plot and decide on the stylewithhold information about the buyer or seller
of the property to be built. We eventually decidedwhich may be beneficial to the other despite the
on a single storey home in Kissimmee. Once itseller paying their fee. In Florida the realtor you
was completed, it was everything we dreamed itchoose can only work on your behalf and is legally
would be.bound to act in your best interest disclosing
You have already taken the first step towardinformation such as - is the property worth the
purchasing your home by reading this article.asking price - are there similar properties available
Though buying a property in Florida is relativelyat a better price - are there any known future
uncomplicated we still hear many stories of peopledevelopments that may affect the value of the
who have had problems in one way or another.property.
Please don't forget that the experience of buyingMortgages
your Florida villa should be pleasurable and exciting.Many British citizens who buy a holiday home in
From visiting the various developments, choosingFlorida, are unsure whether to arrange a US or
the plot and house that is right for you to finallyUK mortgage.
making the purchase.Most US mortgages enable you to lock into a
Location, location, locationfixed rate mortgage for up to 30 years. In our
The next step to buying your home requiresopinion, this is the best way forward as you will
some ground work to be done by yourself prioralways know what your monthly mortgage
to arriving in Florida. Firstly decide where you wantoutgoings will be - there will not be any interest
to buy. Do you want the villa to be close torate increases. The only drawback is that
Orlando's many theme and water park attractionsexchange rate fluctuations will affect how many
or do you prefer to be near the beaches? If youdollars you get to the £ when you transfer
prefer the beaches, do you prefer the Gulf Coastmoney over to your US bank account. However,
or the Atlantic Coast. Whichever you decide, asif you keep an eye on the rates and transfer
with all investment properties location is verymoney at the correct time, these fluctuations will
important. Once you have decided on yournot have a significant effect on your expenditure.
location, you must decide the type of property,A UK mortgage can be arranged through several
the number of bedrooms, bathrooms, pool, etc.companies dealing with homes in Florida and
Do you want to be on a small development orusually offer variable rate mortgages closely linked
larger resort development, do you want a gatedto our own bank base rate - usually around 1.5%
or non gated community.above base rate. They do offer a fixed rate but
And last but not least what is your budget.usually for a maximum of 3 years. The issue with
Do You Need To Rent Your Property ?this type of mortgage is that your repayments
This is a very important question as it willare always subject to interest rate increases.
determine where you can buy. Only certainRemember that if your mortgage payments
communities in Orlando are zoned for STR (Shortincrease, you cannot increase your weekly rental
Term Rental). Please do not accept any verbalprices. The upside is that your repayments are
guarantees from salespeople regarding STRnot subject to exchange rate fluctuations.
without checking in the covenants and restrictionsManagement
of the developer.Once you have purchased your Florida vacation
One of the most important decisions you willvilla, whether you intend to use it for your own
make is choosing the development which suitspersonal use, or for short term rental purposes,
your needs best. Remember not all developmentsyou will most definitely need to employ the
allow short term rental and if you intend to rentservices of a reputable management company to
your property this is the single most importantlook after your investment. In this section our aim
item you must consider.is to advise you on the do's and don'ts of
Remember the developers' agent is acting onmanagement in Florida.
behalf of the builder, and is bound by law toWhich Type Of Management Company Should I
obtain the best possible deal for the builder, notChoose ?
for you. Some builders and managementThe simple answer to the question above is really
companies offer guaranteed rental programs.down to individual circumstances. In Orlando there
These include a minimum income for an agreedare literally hundreds of management companies
period (usually 12 months) or alternatively, aoffering their services to villa owners. They vary
minimum number of weeks booked for the year.from the very large companies with hundreds of
What you are not told however is what thehomes on their books to the small husband and
income will be for those weeks or what the agentwife teams with just a few homes. Our advice, is
will rent your property out for (for example, youthat you look into which type of Management
may receive £350 per week but the agentCompany suits your personal needs and
is renting it out for £450 per week).aspirations for your villa, speak to at least 3
We strongly advise that if you decide not tocompanies and make you final decision from
secure rentals for the property yourself, then youthere. If possible obtain recommendations from
thoroughly investigate any proposals presented tocurrent villa owners who deal with the proposed
you from Management Companies / LettingManagement Company.
Agents.What Should I Expect From My Management
Our advice is that if you have the time, youCompany ?
market the villa yourself. This allows you toLawn maintenance, villa cleaning and inspection,
maximise your income and makes it easier topool maintenance, villa maintenance, pest control
reach that magical break even point of incomeand perhaps bill payment facility.
versus expenditure. If we are being honest thisDealing With Licencing Issues
can be quite time consuming but well worth theAll Florida vacation villa owners who intend to rent
effort when the bookings start to come in. If youtheir villa for short term rental purposes must be
go down this route you will have to consider theproperly licensed with Department of Regulation,
costs involved in marketing your villa. Costs coulddivisions of hotels and restaurants and a Florida
include newspaper / magazine advertising, creatingstate agency. Before the licence is issued the
your own website, listing your villa on otherproperty will be inspected by a Florida state
websites and other incidentals like business cards,agency, this will cost in the region of $150 for a
flyers etc.single family home.
Inspection TripsTaxes
We would highly recommend you look at theIn addition to the property taxes that every
possibility of an inspection trip. This can be purelyhomeowner has to pay, an additional tax based
for the purpose of choosing your dream home oron the gross rents received must be collected for
can be combined with a holiday / vacation.any rentals of 180 days or less. This is made up
While there are benefits to both scenarios if youof 5 or 6% Tourist Development or Resort Tax
have limited time available and are there, purelyplus 6 to 7% State of Florida Sales Tax.
with the inspection of properties in mind, then youTherefore, a total of around 11% to 13% of
are more focussed on the job in hand. However,gross rentals received is to be paid in State and
we would recommend an absolute minimum of 4County Taxes. Normally these taxes are charged
days for an inspection visit. You will need to meeton top of the rents and paid by the tenants -
up with the Realtor to view several villas andmuch the same as would take place with a hotel
communities, spend a few sleepless nights decidingor motel. However, for our homes, we include the
on which property to purchase, sign contractstaxes within the price we quote so that the
with the builders, pay the deposit, choose thepotential guest does not receive any nasty
colour of the house etc. Decide on the shape andsurprises when the final rental cost is calculated.
size of the pool and type of pool tiles, open aTaxes that are collected from rental income must
bank account and look at some of the furniturebe submitted to the appropriate agencies on a
packages that are available. A very hectic butmonthly basis by the 20th of the following month,
rewarding few days.in compliance with the law. In other words, rental
Alternatively If you can spare more time, it willincome received in August must be paid by the
give you extra opportunities to view a few more20th of September. By paying these taxes, you
developments over a longer period, then take aare assured that you are properly registered for
few days to contemplate and narrow your choiceState and County Tax. It is the responsibility of
down to a couple of villas before finally viewingthe owner to declare the rental income achieved
your favourites again.on Owner Bookings and to pay the relevant
You will also have more time to investigate thetourist tax. If your Management Company has
local area and amenities such as shops,made bookings on your behalf and taken the
restaurants, banks and supermarkets to satisfyrental income, then it is their responsibility to
yourself the area has what you and your guestsensure all taxes are paid to the relevant
will be happy with.authorities. However, you need to check this
Its now time to make your final decision. Shouldhappens as any default on payment is YOUR
you buy a new home or a resale.responsibility. For this reason, my wife and I pay
Should you decide to have your dream homeall taxes for our properties - once again enabling
newly built, you will then sign a contract with yourus to keep strict control of our finances.