Buy to let in Orlando - madness/reasonable?
Discussion
well as it says above. We're starting on looking at whether a BTL in Orlando is a viable idea... size & pricewise we'd be looking at the lower end of the market (so in this case say 2/3 beds @ 150ish) and non-mortgaged.
I know that depending on where you buy you can expect to be bent over on HOA fees so that's an obvious factor to look into. I'd have thought that the biggest issue is finding a good managing agent out there (and then the fees associated with this service).
The 2/3 bed scenario seems to tick more boxes since you're then looking at the small family or young couples market rather than the large 6/8 bed villas which may well be of more interest to the 'party on crowd'.
A nice side effect of this is that we could then (if we wanted) take a break there during a quiet period.
An obvious question has to be regarding tax - do you pay this to the UK IRS (being as we live in the UK and it's income) or is it payable in the US seeing as that is where any funds are earned? I'd imagine that if you are able to get an account with a US bank which has an outlet over here that may make things easier since my understanding (very limited, but it's early days yet) is that it can be very difficult for a non-US resident to get a bank account,
Naturally full advice from an FA and accountant is going to be done, this is just a prelim
I know that depending on where you buy you can expect to be bent over on HOA fees so that's an obvious factor to look into. I'd have thought that the biggest issue is finding a good managing agent out there (and then the fees associated with this service).
The 2/3 bed scenario seems to tick more boxes since you're then looking at the small family or young couples market rather than the large 6/8 bed villas which may well be of more interest to the 'party on crowd'.
A nice side effect of this is that we could then (if we wanted) take a break there during a quiet period.
An obvious question has to be regarding tax - do you pay this to the UK IRS (being as we live in the UK and it's income) or is it payable in the US seeing as that is where any funds are earned? I'd imagine that if you are able to get an account with a US bank which has an outlet over here that may make things easier since my understanding (very limited, but it's early days yet) is that it can be very difficult for a non-US resident to get a bank account,
Naturally full advice from an FA and accountant is going to be done, this is just a prelim
I'd also consider property tax.
It's kind of like council tax, but is quite variable depending on location. Maybe tenant pays that though? Might be worth checking what the norm is.
As for the tax, you would pay tax in the UK and in the US, I might be wrong but I think there is a double taxation treaty so you'd only pay tax at the highest rate.
I'd probably check an accountant in UK who can deal with both. I know of 1 in my town.
I'm sure someone else will be along to explain whether or not it's a good business decision.
It's kind of like council tax, but is quite variable depending on location. Maybe tenant pays that though? Might be worth checking what the norm is.
As for the tax, you would pay tax in the UK and in the US, I might be wrong but I think there is a double taxation treaty so you'd only pay tax at the highest rate.
I'd probably check an accountant in UK who can deal with both. I know of 1 in my town.
I'm sure someone else will be along to explain whether or not it's a good business decision.
Correct, US UK have a reciprocal tax agreement, anything paid becomes a tax credit in the other country.
Property tax in Florida is about 1%
What ROI are you looking for?
If you are intending short holiday lets you will be the one picking up the utilities, that bill will be far higher than prop tax or HOA
You will not be able to turn off the AC or the house will become unbearable hot and will take two days too cool
Property tax in Florida is about 1%
What ROI are you looking for?
If you are intending short holiday lets you will be the one picking up the utilities, that bill will be far higher than prop tax or HOA
You will not be able to turn off the AC or the house will become unbearable hot and will take two days too cool
Saleen836 said:
My advice from an owner on short term rentals is....DO NOT DO IT!
have sent you a pm, let me know if its received
Could I also get that PM as Im scouring different locations for investments at the moment and holiday home is one of those that is on the list and of the several countries I always seem to go back to Orlando as an idea.have sent you a pm, let me know if its received
Du1point8 said:
Saleen836 said:
My advice from an owner on short term rentals is....DO NOT DO IT!
have sent you a pm, let me know if its received
Could I also get that PM as Im scouring different locations for investments at the moment and holiday home is one of those that is on the list and of the several countries I always seem to go back to Orlando as an idea.have sent you a pm, let me know if its received
Saleen836 said:
My advice from an owner on short term rentals is....DO NOT DO IT!
have sent you a pm, let me know if its received
Every time a thread like this comes up an owner (or ex-owner) says don't do it. Sound advice IMO.have sent you a pm, let me know if its received
If you want a holiday home then fine, letting is just a means of getting some money back. If you want to run it as a business then why choose to do it so far from the UK. It would have to have a really good return to be worth the added hassle.
Saleen836 said:
WEHGuy said:
Saleen836 said:
My advice from an owner on short term rentals is....DO NOT DO IT!
have sent you a pm, let me know if its received
Why? I was told you can get as much as 45 weeks occupancy.have sent you a pm, let me know if its received
Also, if the OP wants to use the property when it's not rented, a long-term renter doesn't work.
Absolutely a risk/reward conversation, but revenue on 45 weeks occupancy at vacation rental rates will be a damn sight higher than 52 weeks on a long-term rental.
ReaperCushions said:
Saleen836 said:
WEHGuy said:
Saleen836 said:
My advice from an owner on short term rentals is....DO NOT DO IT!
have sent you a pm, let me know if its received
Why? I was told you can get as much as 45 weeks occupancy.have sent you a pm, let me know if its received
Also, if the OP wants to use the property when it's not rented, a long-term renter doesn't work.
Absolutely a risk/reward conversation, but revenue on 45 weeks occupancy at vacation rental rates will be a damn sight higher than 52 weeks on a long-term rental.
From what I have read elsewhere such as thedibb, most villa owners are happy if they are able to break even. Supply outweighs demand. Also a lot will spend their holiday time over there working on the villa, which doesn't sound like much of a holiday to me.
As someone else mentioned, I would treat it as holiday home from which you might be able to recoup some costs, rather than a profitable business venture.
As someone else mentioned, I would treat it as holiday home from which you might be able to recoup some costs, rather than a profitable business venture.
The property angle is one thing but it's really a massive FX punt....unless you have a particular reason to be buying the U$ or you think £/$ is heading to parity. If FX rate was $2 to £1 it's a very different investment.
Really whether you make out lose 5% a year on the property i.e. If it's a $200k home whether you make $10k in income you could very easily lose 10% on the FX rate ($ 20k).
Even people I know who've done well out of renting holiday homes wouldn't do it again....massive ball ache and if you want to make it work you just can't let third parties do everything.
Really whether you make out lose 5% a year on the property i.e. If it's a $200k home whether you make $10k in income you could very easily lose 10% on the FX rate ($ 20k).
Even people I know who've done well out of renting holiday homes wouldn't do it again....massive ball ache and if you want to make it work you just can't let third parties do everything.
I thought about this but in Spain. When I crunched the numbers I actually worked out I could rent a place for a month for the next 80yrs rather than throw my savings into it. Also too many variables for me buying to rent/let abroad as I'm not looking for income. Plus I doubt I'd want to go to the same place every year and whilst renting it out would fund an alternative holiday I'd rather pay from my own money than take on the hassle.
Buying a USD house with GBP money makes it very expensive at the moment.
If GBP appreciates against USD then you will lose when you sell.
A mayor risk of a landlord in one country and your letting agent in another is - out of sight, out of mind, meaning that you can be screwed over quite easily. Like getting invoiced for work that is not done or fixtures than are replaced that didn't need replacing and were not actually replaced. We are currently suing one letting agent over that...
If GBP appreciates against USD then you will lose when you sell.
A mayor risk of a landlord in one country and your letting agent in another is - out of sight, out of mind, meaning that you can be screwed over quite easily. Like getting invoiced for work that is not done or fixtures than are replaced that didn't need replacing and were not actually replaced. We are currently suing one letting agent over that...
Daaaveee said:
From what I have read elsewhere such as thedibb, most villa owners are happy if they are able to break even. Supply outweighs demand. Also a lot will spend their holiday time over there working on the villa, which doesn't sound like much of a holiday to me.
As someone else mentioned, I would treat it as holiday home from which you might be able to recoup some costs, rather than a profitable business venture.
There's one poster on TheDibb I can think of who has three decent sized places, acquired over the last few years and he's thinking of adding more. The Dibb villa owners all seem to do OK, but they do work hard at promoting their villas.As someone else mentioned, I would treat it as holiday home from which you might be able to recoup some costs, rather than a profitable business venture.
I would have thought the bottom end of the market, where the OP is looking, would be a complete nightmare as it's going to be largely about price.
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