Florida: A great place for property investment in 2010

Florida propertyThe Sunshine State has always been a popular place for overseas property investors however in the last 18 months, it has fallen out of favour. Prices have crashed – in many cases, property prices have halved – and Florida had the second highest foreclosure rate in the America in 2008 affecting a massive one in 22 properties. Having been siezed by the banks, many of these Florida foreclosed properties now remain empty.

The sheer quantity of properties being foreclosed, and the number of empty properties littering the state, left many investors nervous about buying property in Florida. However in recent months, interest has started to pick up again.

There are some definite bargains to be had with some flats in some condominiums on sale for as little as $15,000. However as with any property purchase – in Florida or otherwise – caution is advised. Some Florida properties are cheap for a reason – they could be in a rough neighbourhood or need complete renovation.

If you are planning to buy property in Florida, the first question is which area? The two coasts are very different: the west coast has a relaxed feeling with sub tropical temperatures and is centered on the Tampa and Sarasota, elegant and classy; the east coast is defined by Miami, a hectic city full of nightlife and luxuy.

On the west coast, there is plenty of choice although at the lower end of the market, there is plenty of competition. A two-bedroom lock-up flat within walking distance of the beach will probably set you back around $250,000. However it is better to go for a family home rather than a condominium as they tend to hold their price better and tend to have higher resale values and therefore represent a better overall property investment.

For Miami, there are plenty of property bargains to be had with prices down between 30 and 50% from their peak. Property prices are fairly stable now therefore property investment in Miami is a pretty safe bet.

BuyingForeignProperty.com recommends looking for land if you are looking for a long-term real estate investment as land values have dropped massively and it may be possible to grab some major bargains.

If you are planning to finance your propety investment with an American dollar mortgage, make sure you factor in fluctuating exchange rates into your calculations. You may also be able to take out a mortgage half in your home country’s currency and half in American dollars to help stabilise the fluctuations a little. Remember that you will be liable for real-estate tax which is an annual fee of 2% of the purchase price.

If you are planning to rent out your Florida property, check the small print of your property carefully as many condominium assoications have rules governing how many rentals you are allowed in a year. There may also be other local restrictions in force.

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