With property values rising faster than the national average, Florida is attracting plenty of interest from foreign buyers, including David and Victoria Beckham, who are rumoured to have bought late fashion designer Gianni Versace’s mansion in Miami for a cool £36million.
Florida has always enjoyed attention from British investors. Home to some of the world’s most popular theme parks, it doesn’t just offer fantastic weather, great entertainment and regular flights from the UK; property there still costs a lot less than it did prior to the financial crisis in 2008. So even though the rich and famous may still have an eye for a bargain, you don’t need a celebrity bank balance when it comes to snapping up a home in the sunshine state.
Pending sales increased by 17.6 per cent last year, according to the Florida Association of Realtors, and closed sales rose by 11.8 per cent. The state’s median sale price rose by 15.9 per cent to $168,000, while the national median sale price increased by 11.5 per cent in 2013 for single family homes, according to the National Association of Realtors, with the median price reaching $197,000 for the year. So, not only are prices in Florida increasing faster than the national average, they still have some way to climb before they catch up with the rest of the country.
Prices in the Orlando area in particular are also still way below their median peak of $264,000 in 2007, so it’s perhaps no surprise that investors are excited about how much further prices may be expected to rise. Foreign investment in Florida now accounts for almost a quarter (23 per cent) of sales, according to NAR, the largest share of foreign real estate investment in 2013 of any state in the USA.
And if you’re not lucky enough to be cash buyer, finance is still a good option. Mortgages are generally available for purchases up to 65 per cent of the property’s value, depending on the state in which the property is located. Most are on a repayment basis, the maximum term is 30 years, and interest rates and loan terms tend to vary depending on the property type and exact location. The minimum loan size is $85,000 in Florida (it’s $150,000 in other states) and rates currently start from just 3 per cent. Many deals have no early redemption penalties so lump sums may be paid off the balance at any time without incurring a penalty.
Bear in mind that if your rental income is likely to be in dollars, it may make most sense to take out a dollar-denominated mortgage, so that you’re not subject to any currency fluctuations. Renting out your Florida property could also come with some tax-efficient benefits, as it’s possible to offset mortgage interest payments, as well as other expenses, against any rental income.