Needs some serious thought. Very interesting idea.
Very interesting! I assume that, if I decide not to visit Florida (extremely likely; the place doesn't interest me much, neither does living alone in some gated community for a week) then I can just keep the place rented out during my week and take the money (assuming anyone rents it of course).
I really wish that I could participate as this sounds like tempting one but too soon for me... I would be keen to hear what the outcome is.
I have been thinking of buying a US property for it seems ages and the recent dramatic shift in CHF to USD rates might make this the ideal time.
Yesterday I spoke with my American work colleage and some of my dreams were dampened.
In a nutshell there are some static yearly taxation costs that you will have to bear, which I never considered before.
In our case, we had thought about a modest home for retirement . Here are the factors:
+ advantage
- disadvantage
++ CHF to USD exchange rate has gone bonkers
+ US houseprices at a really low ebb
- There is a lot of low cost crap out there!
- Rental rates are down too ??
- You need to pay state tax yearly based on purchase price
- You need to pay school tax yearly based on purchase price
+ You can offset taxes against any income you are earning in the US, but then you'd have to be earning in US (and not for example just retired)
+ rental income would of course count as income
- As with any overseas property to do the job properly you'll need to pay insurance, electricity, house maintenance charges
My US colleague estimated the taxes for (say) a 500K USD property at several thousand USD. This really influences the economy of buying a property for retirement / part time use whilst living in the US
I fear that the current US house over-supply makes profitable renting difficult so in short ..
If you are going to buy regardless then now is a good time.
If you have that friendly, reliable US family who can inhabit your home for a decent rent, then its do-able
Else, you can arbitrage/ convert your CHF to USD at todays rate and buy a property later with it, should that be your ultimate goal.
a lot of this is of course correct, but taxes etc are different in different states.
Im specifically referring to Florida for which there is no school tax and the situation re rentals is different as you arent lookign for long term tenants, so to address the points:
++ CHF to USD exchange rate has gone bonkers OK THATS GOOD
+ US houseprices at a really low ebb OK EVEN BETTER
- There is a lot of low cost crap out there! YEP, DONT BUY THESE
- Rental rates are down too ?? NOT FOR SHORT TERM
- You need to pay state tax yearly based on purchase price YES
- You need to pay school tax yearly based on purchase price NO
+ You can offset taxes against any income you are earning in the US, but then you'd have to be earning in US (and not for example just retired)YES
+ rental income would of course count as incomeYES
- As with any overseas property to do the job properly you'll need to pay insurance, electricity, house maintenance charges OF COURSE, BUT THIS IS COVERED BY RENTAL INCOME
I wouldnt consider a home in say, Nevada , as a good investment as you say though.
I am interested can you PM me with details? I just had family fly over to Orlando for a 2-week Disney vacation with a bunch of kids and they did struggle to find the right short term rental - everything was booked!!
One risk which is hard to quantify is the financial status of the other owners in the same gated community; if they do not pay their $400 a month regularily (or at all) then the debt mounts up & eventually bounces back on you in some way
Not paying the HOA fees, one risks losing the property, of course it's worth less than the mortgage that will happen!
If its rental property then insurance will cost more. Insurance co. are afraid (correctly) that renters will not take care of the property as an owner living in the house would. Suggest you also get liability insurance in case a renter gets hurt in the house. Lawyers love to sue.
The rental scenario sounds more like a "time share" concept which Disney has developed to an art.
Risk is it becomes a spiral.
Some owners do not pay so lose their properties.
Consequently the remaining owners have to pay more until the properties are sold again.
Because the costs are higher more owners do not pay so lose their properties.
Consequently the remaining owners have to pay more.......
& so it goes on....
Seen that scenario in Spain a few times....
You may also want to check the students' market:
http://www.marketwatch.com/story/top...wns-2011-08-10
There are companies that for a fee can manage the rentals and maintenance.
ok ive just come off the phone with the realtor and the offer on the property i sent round has been accepted for USD 216,000. Add a few closing costs and then furniture the lot could be done for USD 250,000 and ready to rent. if the property is to be financed by mortgage there are an additional USD 10k of costs but of course less money up front.
This will be gone by the close of day so is anyone interested in a stake?
The property in question:
http://www.realtor.com/realestateand...652?source=web
So who is in, in principle? Note if the property doesnt "appraise" at the right price, we can all walk away or indeed we can walk away at any time.
One thing that I haven't seen mentioned (but on another forum I found while researching): hurricanes.
Is there an insurance against hurricane-damages?
In the other forum, people concluded that if you don't have to borrow the money, it sort-of pays for itself. But it's not easy.
Granted, it was a German forum and the exchange-rate was different (comments from 2008-2010).
yes, the insurance covers all.. the property is well inland so dont think there shoudl be an issue anyway.
im sending over USD 6k to secure the property now.. completely refundable, no questions asked but needs to be done to secure the first refusal rights. This give 4 days to do an appraisal and then arrange financing (if requried) and then 30 days to close. At any point we cna pull out for no costs at all (maybe 400 us for the appraisal if we get there)
Whats the exit stratergy? sale in 5 years? Thanks
So, it's basically that one has to make up his mind this weekend?
In any case, I have to discuss this with the GF...
im guessing we put an amount on it.. i.e if its worth 400 for example and the majority decides to sell then it has to be sold.
got 50% investment now .. would be nice for couple of others to come in and make it a cash deal..
How will the property be held? Joint names or a company? I am thinking about tax implications
the problem with these are they are such good deals , they are coming on market and then going same day so we need to act fast. we can still pull out at any time right to closing (30 days) but just good to know who is involved.
i would happily buy it just on my own but i would rather get a few people involved!
it can be held in my name and then have a seperate legal document or i am happy to put it through a company.. but i beleive there is slightly more tax to pay that way?
also liability insurance given it's the US