r2i forum

Hi,

I would like to get member opinion about buying property in FL for pure investment purpose.
The home prices are going down, so trying to take advantage of it.
The thinking behind it is
1. Can be sold in future and the money can be used for kids education or any other purpose when money is needed and market gets better.
2. Can be rented out all these years.
3. In old age can become a primary receidence to get away from the cold weather.

Any thoughts?
Also How to find the forclosed home/townhomes/condo in FL? Is it a good idea to buy second home for investment purpose in USA? Has anyone done this? How was their experience and would they suggest it?

thanks,

Nowadays, money in bank is worthless, Interest rates down, property prices down. I am not sure why are you still thinking, if you have MONEY & GUTS jump in.

mumbaikar;278226Hi,

I would like to get member opinion about buying property in FL for pure investment purpose.
The home prices are going down, so trying to take advantage of it.
The thinking behind it is
1. Can be sold in future and the money can be used for kids education or any other purpose when money is needed and market gets better.
2. Can be rented out all these years.
3. In old age can become a primary receidence to get away from the cold weather.

Any thoughts?
Also How to find the forclosed home/townhomes/condo in FL? Is it a good idea to buy second home for investment purpose in USA? Has anyone done this? How was their experience and would they suggest it?

thanks,

Hello Mumbaikar,

I agree with you. The prices are low. In long term you can get very good appreciation. One caution. Especially for condos, do consider the monthly HOA fees and carefully read the owner/association aggreemnents. Some of the condos does cost a monthly HOA fee of over $1000. I have seen some listings on ebay going very cheap. Owners are trying to get rid of them due to high HOA fees. Please do post your experiences with this purchase on the forum. I may also jump in....

The prices in FL look cheap..too cheap
but its imp that you consider
-HOA Fee
-The huge inventory(broward and Miami Dade have online online route for auction).During the boom days,there was lot of construction and so the inventory is very high(atleast in South FL where is stay)..so the prices may not go up anytime soon
-There is no good job market in this area..so if its speculators/investors buying then we are going in the same route that got us into this mess
-Please dont go by the last purchase prices as they will be astronomical.Check the just values listed by the county in on their website and that will give you an idea on what is the true value of the place

(I have helped a few friends buy condos in our area and they are renting out now.If you can find a renter its a good option,but you continue paying the HOA fee even if you are not renting. HOA accounts are in red,so many banks dont give loan in a lot of communities(cash only sale))

Will try to reply detailed whenever i get time..started replying while going to sleep

mumbaikar;278226Hi,


Also How to find the forclosed home/townhomes/condo in FL? Is it a good idea to buy second home for investment purpose in USA? Has anyone done this? How was their experience and would they suggest it?

thanks,

Unless you are an experienced hand,I wouldnt suggest buying Foreclosure property.There might be liens on it and the place may not be in the best of shapes.country online foeclosure sites are a place you can start (Eg : https://www.broward.realforeclose.com/) .Try short sale(not quick,takes a long time) or REO

My brother has 3 townhouses in Kissimee, FL to sell. If any one interested let me know. He is selling for very reasonable price.

I hope the decision is after a well thought out plan.

You will spend:
- time in searching. other options like index funds may take lesser time.
- expenses in visiting the place
- down payment
- closing expenses
- Realtor expenses if any.
- interest over the loan ever year
- HOA fee every year
- maintenance for the premises
- management expenses - self/agent.
- tax filing expenses yearly
- commercial license expenses for the local city -if rented
- depending on the contract with tenant, you may/may not pay for lawn maintenance, pool maintenance monthly.
- if rent is lower than monthly mortgage, monthly deficit to paid from pocket.
- the above expenses cannot be claimed against "losses" at the end of year unless your total income is less than 125K p.a. They accumulate until the house is sold.
- home owners' insurance yearly
- flood insurance if applicable yearly.
- hurricane damages in any of the years during the hold time. - highly variable.
- Formal valuation of property via agent at time of buying and selling - costs money.
- Selling costs - listing costs, brokerage costs, bank account closure fee etc.
- More time spent in all of the above. For some of us, time = money, or time for family fun etc.

Please enlist all of the above for the specific property you are considering.
I am assuming OP would be willing to hold over 7-8 years.
The property gets older with each passing year and gets depreciated for the constructed part.
When the time comes to sell, builders would sell new properties at a comparable value price.
You have to under-price to be able to sell.

The place has to be free to get inspected as and when desired by the potential buyer. That means, no tenant while it is on the market for sale for say, 3-4 months.

Now, add up the expenses and compare against the final amount you would take home after the above considerations.

If the net returns beat the returns you would get in the Index fund market, sure - follow the dictum: "if you got guts, jump..." "No risk - no profit".

I would suggest to be careful with your asset allocation. Unless, your rest of money is invested safely and the money to be invested in FL is "play money"...stay away.

Just a word of caution.

best.

I believe property taxes are very high in FL. Anybody has anyidea how much they are in panama city?

TIA,

old_city_fella;280120I hope the decision is after a well thought out plan.

You will spend:
- time in searching. other options like index funds may take lesser time.
- expenses in visiting the place
- down payment
- closing expenses
- Realtor expenses if any.
- interest over the loan ever year
- HOA fee every year
- maintenance for the premises
- management expenses - self/agent.
- tax filing expenses yearly
- commercial license expenses for the local city -if rented
- depending on the contract with tenant, you may/may not pay for lawn maintenance, pool maintenance monthly.
- if rent is lower than monthly mortgage, monthly deficit to paid from pocket.
- the above expenses cannot be claimed against "losses" at the end of year unless your total income is less than 125K p.a. They accumulate until the house is sold.
- home owners' insurance yearly
- flood insurance if applicable yearly.
- hurricane damages in any of the years during the hold time. - highly variable.
- Formal valuation of property via agent at time of buying and selling - costs money.
- Selling costs - listing costs, brokerage costs, bank account closure fee etc.
- More time spent in all of the above. For some of us, time = money, or time for family fun etc.

Please enlist all of the above for the specific property you are considering.
I am assuming OP would be willing to hold over 7-8 years.
The property gets older with each passing year and gets depreciated for the constructed part.
When the time comes to sell, builders would sell new properties at a comparable value price.
You have to under-price to be able to sell.

The place has to be free to get inspected as and when desired by the potential buyer. That means, no tenant while it is on the market for sale for say, 3-4 months.

Now, add up the expenses and compare against the final amount you would take home after the above considerations.

If the net returns beat the returns you would get in the Index fund market, sure - follow the dictum: "if you got guts, jump..." "No risk - no profit".

I would suggest to be careful with your asset allocation. Unless, your rest of money is invested safely and the money to be invested in FL is "play money"...stay away.

Just a word of caution.

best.

The best way to enjoy a piece of life in Florida as the place of purchase. Florida Investment Property provide just that - a place where you can come back year after year, and a perfect holiday. One of the pleasures of life and leave the state of the peninsula, what is happening, the heat, the beach is nearby. Florida attractions can also be a neighborhood, if you choose the investment in real estate in Florida.