These hurricanes.

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Jen
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Joined: Mon Sep 20, 2004 1:36 pm

These hurricanes.

Post by Jen »

Hi,

I have been thinking how nice it would be to invest in a place in Florida and rent it out 2/3 of the year but now I am getting cold feet. Why? All of these hurricanes!! Is this normal weather for Florida over the long term? I mean has there been two or three in a row like this before, or is global wrming to blame for this? One final thought, any hurricanes in California? :D
ChrisR
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Location: Orlando, Florida
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Post by ChrisR »

Hurricane season is about June to October. however it is very rare for many to make landfall. It was 55 years since 2 had hit the same part of Florida in a year and 10 years since the last really major one. Little tornados are common in the hurricane season. So far this year there have been 11 hurricanes or tropical storms but most stay in the Atlantic.
More concerning than the hurricanes is the number of rental properties being built. Before long the market will be saturated and even more owners will go bankrupt. :cry:
Stephen
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Location: Northumbria/Cumbria Border / Florida
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Post by Stephen »

Jen I agree with ChrisR it's not so much Hurricanes that you have to worry about !! It's the competition !! there are so many villas being built and so many British buying them,with the
promise of renting them out for for 35 weeks of the year...

"Put 20% down and we gaurantee to rent out your home for 35 weeks a year " what a load of crap... I rented a 5 bed 3 Bath
luxury villa for a friend in the next street to our villa for £400 a week and that was in July !!! people get so desperate that they will take anything for their homes as long as the can pay the mortgage.. We have owned our home for 6 years and the competition grows every year.. I would never advise anyone to buy a home in Orlando as an investment...even though I could now sell our home and make $100,000 profit.

We have a holidy home in the Chilly North of England which we rent out for roughly the same money and it is booked out 3 times as much as our home in Orlando..

I would advise anyone who is considering buying a home in Orlando to use the forum www.top-forums.com site for about a month and read all the back articles because it is a good education.

At the same time we love Florida and have no Intention of selling our home there, even though we only rented it out last year for about 12 weeks.

Stephen
Jen
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Joined: Mon Sep 20, 2004 1:36 pm

Post by Jen »

That doesnt't sound so good, or are you guys trying to scare me off :wink: :lol:
I'm not sure I would look at Orlando/Disney anyway, probably the Gulf coast. Is the competition as bad there as well? Where would you invest if you could anywhere in FLA, I mean to also get a return from holiday lets.
Stephen
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Post by Stephen »

Jen
I'm not trying to put you off, I just think that you should know all the facts before buying in Florida as the realtors over
there just tell you that It is a bed of roses...

We were going to Florida for 10 years before we bought a villa
and for about 5 years we used to go and see all the new show homes until we knew enough and then decided to buy...after we came to the conclusion that you don't beleive everything they tell you.

I don't know what the competition is like on the Gulf Coast but
if you go onto www.lastminutevillas.net or any other website and see how many replies you get..

I think anywhere apart from Orlando should be ok to rent out,
without too much competition..

As I said don't let me put you off.. some people will say it's the best thing they have ever done.. we paid $180,000 for a 5 bed 3 bath villa 3100 square ft !! you can only buy a 2 bedroom flat for that where we live now.

Stephen
Jen
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Joined: Mon Sep 20, 2004 1:36 pm

Post by Jen »

OK, thanks for the advice. Hey aren't forums cool?
Nigel
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Florida & USA

Post by Nigel »

Hi Jen,
Don't be put off if you want to buy in Florida. I agree with the others that it is not a profit making venture. Also the you must take with a pinch of salt all the promises made by realtors and management companys.
We have had numerous problems over the past 4 years, from break ins, to damage, to items going missing, to cleaning - the list goes on. However we do not regret it one little bit. We get 2 good holidays a year, in super weather (normally).
That feeling of going through your own front door still has not worn off.
If you can afford to cover costs go for it. We hope to have paid off our mortgage in about 5 years time, when we hope to spend longer periods over there.
It is a mine field take advice from other home owners and be prepared for a rapid learning curve.
If I knew then what I know now!
Jen
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Joined: Mon Sep 20, 2004 1:36 pm

Post by Jen »

Hi Nigel

I am very grateful for the good advice I am getting. But tell me are we talking not even covering costs in Florida? Are you guys getting a negative on the old balance sheet but your happy to have a super holiday home? I would need to be at least covering the mortgage, maybe £500 a month. Is that unrealistic on a 3/4 bed house?
Nigel
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Florida & USA

Post by Nigel »

Hi Jen,
Its hard to make ends meet. Not just the mortgage, its all the other costs. Every month you will have to pay management fees say $300.00, Phone $35.00, water $60.00, electric $150.00, cable $60.00, gas $50.00, plus cleans following bookings $60.00, plus taxes, plus licences, plus alarm monitoring, plus breakages. The prices of course will vary. This is without the mortgage and insurance.
If you get enough bookings and have good contacts for getting your own rentals then yes it could balance. Its far better for you to get your own bookings than relying on managment. Brits normally stay for 2 weeks min. US visitors sometimes only stay for a few days and you still have to clean after them.
We still like to spend money on our villa, but its fun. We have a British mortgage on our US property. This suits us because most of our money is in sterling. Still no regrets! :wink:
If I knew then what I know now!
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Lisa Speigal
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Help for property owners

Post by Lisa Speigal »

Hi Jen

Reading through this thread, it's true there's lots to consider before taking the plunge and buying a property for vacation rentals. For you and all property owners, we have an excellent tool that you should take a look at.

Our vacation rentals "Healthcheck" is a free tool which helps analyse your profitability and maximise returns. It's easy to use and only takes a few minutes to get the answers you're looking for (or not!).

For more details go to:

http://www.vacationrentalsdirectory.net/healthcheck.php

Good luck!

Lisa
Sharon
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Joined: Wed Oct 20, 2004 10:25 am
Location: Kissimmee Florida
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Re: These hurricanes.

Post by Sharon »

Jen wrote:Hi,

I have been thinking how nice it would be to invest in a place in Florida and rent it out 2/3 of the year but now I am getting cold feet. Why? All of these hurricanes!! Is this normal weather for Florida over the long term? I mean has there been two or three in a row like this before, or is global wrming to blame for this? One final thought, any hurricanes in California? :D
Hi there, well such a lot to say on this subject, we have now owned our villa for 7 years, in the first 3 to 4, we found ourselves sending approx £5000 a year of our own money to top up funds, and we were fairly well booked, now it seems to be running at break even point, which is all we ever wanted , so we are quite happy with that, however this is not a way to get rich quick.
The house itself was purcahsed in 1997 for $104000 and is now worth $280000 so thats good news , however an investment in property in Britain would have done as well if not better!
As far as I am aware properties along the coast are at more risk of hurricane damage, as hurricanes weaken over land, we were lucky this year as we only had minor damage to our bug cage, and previously we have not been affected by hurricanes at all.
If you decide to buy in central florida, we have discovered a few important tips.

1) your villa MUST have a pool, a jacuzzi is also a benefit.
2) it should be within a 15 minute drive to Disney, and close to local shops and ameniteis.
3) The pool must be adequately heated (not solar), check out the costs before choosing between electricity or gas.
4) Find yourself a good managing agent, try to get recommendations (ours has a long waiting list)
5)Find yourself a good managing agent ( I know I said it twice ) i can't stress enough the importance of this.

Having said all this I am now glad that we have the villa, but the first few years were hard, don't attempt it unless you can afford to make a loss for a while, and do not believe the rental return figures that are promoted by builders and agents.
Whatever you decide good luck , there truly is nothing like having your own holiday home abroad.
Jen
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Joined: Mon Sep 20, 2004 1:36 pm

Post by Jen »

Hi Sharon,
When you say you are breakeven now how many weeks of bookings would that take typically?
Do all the managing agents charge the same amount? Or can you negotiate them down?

Thanks!
Jen
Sharon
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Joined: Wed Oct 20, 2004 10:25 am
Location: Kissimmee Florida
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Post by Sharon »

Jen wrote:Hi Sharon,
When you say you are breakeven now how many weeks of bookings would that take typically?
Do all the managing agents charge the same amount? Or can you negotiate them down?

Thanks!
Jen
Hi Sorry for the delay, obviously the notification tick box doesent work so I founs this by accident.

Firstly we have 38 weeks out of 52 booked this year, and still more may arrive before the finish of the year. Our agent is fairly active and often gets us bookings for periods we cant fill ouselves.

No the agents charges differ, and so does their billing, so although one agent may charge less per month they may make charges for changing light bulbs, dealing with difficult guests etc etc which another agent may just consider to be all part of the agreement, it seems you only really know how much it will cost once the bills start coming in.Additionally some agents advertise and take bookings themselves on your behalf, which is a help, as long as they keep you updated about bookings, and they charge the renters a decent rate, after all you have to pay the bills, so there is a level at which its just not worth renting.
Also you need to be sure that you can trust the agent to be honest about when guests are in , and that they pass on the rental monies to you ( oh yes it really does happen)

As far as negotiating the fees, i would feel that this is unlikely, good agents often have waiting lists (as does ours) so if you are able to negotiate a lesser fee maybe you should question just how good they are.

Do let me know if you decide toi go ahead with a purchase, good luck.
Jen
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Joined: Mon Sep 20, 2004 1:36 pm

Post by Jen »

Gulp! 38 weeks booked and you are only breaking even..that's a reality check!
Thanks for the tips on management agents its great to get guidance from p[eople who have been there and done it.

One bit of good news is the exchange rate is bringing down house prices in the US for me!

Cheers
Jen
ChrisR
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Location: Orlando, Florida
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Post by ChrisR »

Just thought I'd add - my break even point allowing for unexpected repairs (eg this month my air conditioning broke down plus pool filter broke, totalling $800) is also around the 38 weeks booked. Have just achieved it.
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