After spending time looking around Europe for a holiday home to buy, John Chauhan fell in love with Florida and bought a property in the Sunshine State. He found the process so easy and enjoyable that he’s now even changed career and is working as a realtor in the state! We talk to John to nd out how he went about nding and buying his dream home…Q. How did you start looking for a holiday home in Florida?
A. I originally started off looking in Spain, Portugal and the south of France. I actually bought an apartment in Cannes at first and, even though I did experience an appreciation in the price, I still had some di fficulties. Despite night schools and several self-help books, I was continually struggling to communicate with all the French rental agents and management companies that come with property ownership there. It wasn’t until a gol fing holiday in Florida that I got a chance to see how Florida’s property market works.
Q. So why did you pick Florida?
A. Well, when I saw how the homes are managed and how sophisticated the system is, I was sold. Compared with France, the market is much easier to deal with. The Americans are very helpful: the special relationship that people say exists between Americans and the Brits is clearly evident. Apart from anything else, the weather is amazing and there are a huge number of very impressive beaches. The standard of living is great but a ordable; we never get tired of visiting.
Q. Did you have any reservations?
A. There were lots of other concerns, such as distance and fl ight time, and the care of my home in our absence. However, I managed to contact other British buyers in Florida and ask them to recommend a property management company. They look after our home when we return to the UK. I’d urge all buyers to consider doing this as it makes life so much easier.
Q. What kind of property did you buy?A. I bought a new-build five-bedroom property in 2001 through a firm called Calabay Homes. They’re an established British firm that deals purely with Floridian real estate, and they built the home to my speci fied requirements. The build started without a hitch and was completed in January 2002.
Q. Do you feel that your property purchase has been a good investment?
A. When I initially bought my home in Florida, appreciation was not a factor. We assumed we would get about a three per cent growth, but due to the popularity of Florida and the exchange rate, we have seen our house appreciate considerably since purchase. Obviously the market today has slowed, with some houses losing value.
Q. What costs did you have to contend with?
A. The US tax regime is pretty similar to the one in the UK. I feel that the IRS treated our home quite generously. Apart from that, utility bills can all be settled at any time of the day or night via the internet, so they haven’t caused any problems. The important point to remember with any holiday home is that, even if you don’t rent it out, you will have fixed costs to meet throughout the year, such as air conditioning, general maintenance costs, pool cleaning and taxes. I’m also currently repaying a $200,000 mortgage, but the rental income covers this and most of our other expenditure. We have a lovely home which pays for itself: we secure 20 to 25 weeks of rentals a year at £650 a week.
Q. Was it easy to rent out your home?A. I found a good property management company that was recommended by a friend, and then set up my own website to help promote holiday rentals. The house is within 20 minutes of Disney World and is set in an executive development zoned for short-term rentals, so it’s right in the middle of a hugely popular area. It also has a swimming pool, an important facility for anyone seeking to buy to let. Demand for the property has been huge and I’ve even had to turn down some potential bookings. The rentals we budgeted for have been achieved easily by networking and our website, and the whole thing has been straightforward, especially when compared with my experiences in France.
Q. What pitfalls should other potential buyers be aware of?
A. Florida is a huge tourist magnet and the potential for a big rental return is huge, but, yes, there are lots of rental restrictions in place, and I did have to check that the property we wanted to buy was in an area zoned for short-term rentals.
Q. What other legislative issues did you have to consider?
A. As we bought our property in a short-term rental community, the house was fully geared up to meet all the legislative standards. We did have to do a few things, like installing fire extinguishers and patio door alarms. If you’re renting out a house, you have to register with the Florida State Department and the Department of Revenue for tax purposes. You also have to apply for a Tax ID number in order to file a tax return, because income from your lettings is tax deductible. The legislature requirements were all fairly straightforward and the
licensing was easy. In most cases, the management company appointed to look after the house will deal with these things for you.
Q. What is in store for your Floridian future?
A. Once the mortgage repayments have been completed, the property should produce a minimum pension of £1,000 a month to help fund our retirement. I enjoyed the process of purchasing and letting so much that I am now a licensed realtor. I can offer buyers all my expertise and experience, as well as a British buyer’s perspective on how to purchase their dream home.