Investing in Florida Property

Country: Florida, United States

The American economy, and the housing market in particular, is having a rough time of it at the moment, largely as a result of the much-vaunted credit crunch. But the pound is still very strong against the dollar - at the time of writing a pound was worth $1.99 - so what are the current prospects for investing in Florida property?

Lars Christiaanse, head of business development at Chesterton International, says: "Florida is not for those looking for a quick return on their investment property, but in the next two to three years it should be a good investment. At the moment prices for investment property in Florida are low. They have been hit by the fallout of the sub-prime collapse and, for property in Miami particularly, there is a sizeable oversupply. So there are definitely deals to be had, especially as the dollar is still weak. You get a lot of investment property in Florida for your pound at the moment."

"As for capital appreciation, I think prices will remain static for at least a year, but as the exchange rate gradually changes, and demand picks up, they will start to rise again," adds Christiaanse.

David Giles, managing director of Property Deals Florida, agrees that the current problems will be beneficial in the long run: "At the moment the property market is suffering from both oversupply and an economic downturn. Both these issues will be resolved in the next two years and the upswing for investors who accept the risk now will be substantial."

Expert opinion on the best areas for Florida property investment largely agrees that Miami and the surrounding area and the Orlando region are the best locations. David Giles says: "Miami and Miami Beach offer the best appreciation in my view over the next five years. Miami is a world-class city and rents and income from premium properties will escalate as the economy reignites. Orlando also has some good opportunities, as the rental market is supported by the theme parks' visitors and employees."

Lars Christiaanse says that Orlando is good for those wishing to rent to holidaying families, while Miami is a "party city" which appeals to the 25- to 35-year-old demographic. He also points to coastal resorts that have golf facilities. "Resorts such as Aventura, Bal Harbour, Daytona Beach and Palm Beach are ideal for retired couples or those with lots of leisure time who wish to buy an investment property in Florida for their own use for perhaps two months per year, and then rent it out for the rest of the time," he says.

One of the most attractive qualities for those looking for Florida property investment is its unique tourist-driven rental market, which has quite possibly the world's only 52-week season. Florida is known as the Sunshine State, with over 300 days of sunshine a year and annual average temperature of 21 degrees Celsius. The state's tourist attractions, such as Busch Gardens, Kennedy Space Center, Sea World, Universal Studios and Disney World, tempt huge numbers of visitors. More than 80 million people visited Florida in 2005, with 53 million visiting Orlando and central Florida alone, making Orlando the world's single-most-visited tourist destination in the world. Lars Christiaanse adds that the recent "open skies" agreement will see more flight availability, making Florida even more accessible.

A four-bedroom villa with pool in Orlando, within a 20-minute drive of Disney World, will rent for between £400 and £600 per week, while a quality two-bedroom apartment in the same area can achieve £250 to £300 per week. In Miami, a two-bedroom condo overlooking Miami Beach can be let for between £500 and £900 per week, depending on the time of year.

There is also a domestic rental market worth looking at. Feltrim Developments says: "With job and income growth outpacing the rest of the United States, Florida has tended to pull job seekers in from other states. The Sunshine State has added 1.35 million residents over the past four years, including 800,000 new residents in 2004 and 2005. The current population of Florida of just over 17 million is set to rise to over 19 million by 2010 and is projected to hit 28 million by 2028 to become the third most populous state in the United States. The bulk of Florida's population gain comes from net inward migration, which accounts for 87 per cent of the state's annual population increase. Most of these new residents are prime working-age adults, who are relocating to take advantage of the state's favourable employment conditions."

The time might be right to snap up Florida property as an investment.

First published in April 2008.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.

George Sell

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Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.

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