Relocating to Florida from Great Britain
The USA always seems to be different than the UK, doesn’t it? For example:
The “English” language is different (e.g. "elevator" versus "lift", “Realtor" versus "Estate Agent"),
Americans drive on the wrong side of the road (just like Europeans),
There’s a lot more sunshine (at least in Florida).
So don’t be surprised - buying a house is also different in the USA! Not better, not worse, just different. As a result, it’s essential for UK Buyers of Florida property to find out about those differences before they set out to buy that dream house in the sun.
What are some of the main differences?
Finding property to buy is easier, because Realtors share clients.
In each major city and region (e.g. Central Florida), Realtors enter the properties they have for sale onto a common computer system (the Multiple Listing System or "MLS").
Any Realtor can show potential Buyers around other Realtors’ houses.
A Realtor typically schedules viewings of multiple properties and accompanies the Buyer to each one. Time is saved and comparisons are easier. There is no need to spend time chasing lots of Realtors.
Buyers often use a Realtor to act for them as “Buyer’s Agent”.Realtors are State licensed and regulated and can advise on all aspects of the purchase (e.g. the contract and the price). This advice is free for the Buyer: for a new home, the Builder pays the Agent’s fee; in a re-sale, it's paid out of the Seller’s expenses.
A firm contract is signed after agreeing the selling price.
The English process of waiting weeks and months for an “Exchange of Contracts” does not happen.
Investing in Florida Real Estate..
Investing in Florida real estate can help to balance your portfolio, for example by diversifying out of other types of markets (e.g. stocks and shares) or by expanding your investment geographically (and the current £/$ exchange makes the USA a very attractive place to transfer funds). There are several advantages to real estate investment:
Good rate of return: historically, real estate has produced a high rate of return for owners/investors, well in excess of inflation.
Leverage: financing is typically available for 70% or more of the purchase price.
Equity build-up: as property appreciates in value and any loan is paid off, investor equity accumulates.
Tax advantages: there are both income and capital gains tax benefits, although this of course varies by country and by individual.
Remember, though, that there are disadvantages too:
Lack of liquidity: the real estate sales process can be lengthy.
Local market: unlike popular stocks and shares, the available market is specialized and local.
Purchase and ownership costs: buying and selling incurs substantial commissions and taxes; ownership imposes maintenance and rent collection burdens.
Risk: increasing costs can negate investment returns and property prices can go down as well as up.