Florida Villa Rental Potential

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JohnnieKippe

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To people with rental properties in Florida

How easy is it to rent out properties there ?
How many weeks per year do you generally rent out ?
Does the money you get cover the mortgage ?

Thanks
 
You also might want to consider the likelyhood of huricane damage.
 
And check out the local tax code. Many places in the US have property taxes that are assessed on the property value and payable each year.
 
Excellent point Clubman.

I have relations in a few states in the US and property tax is a killer.

Usually 1% of the value and in Newyork I thinks 2% plus, depends on the area. This percetage is on an annual basis. If you make home improvements that require a building permit the local authority re-values your property and increases the tax based on the new value. It's a horrible tax, at least stamp duty you get hit at the start and that's it, property tax is constant. At a property value of $500,000.00 this will have property tax of €5000.00 per year which works out at $416.00 per month on top of your mortgage payment. You may be able to offset some of this although I'm not sure how much.
 
Healy1 said:
Excellent point Clubman.

I have relations in a few states in the US and property tax is a killer.

Usually 1% of the value and in Newyork I thinks 2% plus, depends on the area. This percetage is on an annual basis. If you make home improvements that require a building permit the local authority re-values your property and increases the tax based on the new value. It's a horrible tax, at least stamp duty you get hit at the start and that's it, property tax is constant. At a property value of $500,000.00 this will have property tax of €5000.00 per year which works out at $416.00 per month on top of your mortgage payment. You may be able to offset some of this although I'm not sure how much.
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I remember talking to some people in California and they were saying how there are few if any exemptions to the Californian property tax (may vary by county - can't remember) and that, for example, asset rich but cash/income individuals (e.g. senior citizens) with large/valuable houses were often forced to move/sell up/trade down because they could no longer meet the annual taxes from their income. Imagine if that system applied here! There's be a revolution. Or at least even more moaning about taxes than we already have.
 
Well there's currently a similar tax on commercial properties, the only problem is that these properties need to be valued in order to properly tax them.

Again I don't have the link to hand, but wasn't there a story a couple of weeks back where you had the public accounts committee inquiring about the case where a civil servant from the appropriate office that deals with these valuations had legged it with a load of cheques but only got demoted a grade as a result. It turned out that the office had only dealt with 25% of the valuations from the previous 2 years that they were meant to have done.

My point is that the civil service seems incapable here of extracting this sort of tax from the commmercial sector at present, imagine what they'd be like if they had to do valuations for every residential property in Ireland.
 
My sister lives in California and they bought a house for 1.1 million. Their property tax is over $10,000.00 a year. Believe me they are not rich but they got lucky on their first house and made a killing. Most of what they pay on a monthly basis is property tax as they have a small mortgage. It's a joke, I think it goes down slightly when you are a senior citizen. If they had a similar property in parts of New York they could be paying double that!
 
Howitzer said:
Well there's currently a similar tax on commercial properties, the only problem is that these properties need to be valued in order to properly tax them.

...

My point is that the civil service seems incapable here of extracting this sort of tax from the commmercial sector at present, imagine what they'd be like if they had to do valuations for every residential property in Ireland.
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Do you actually mean rates as opposed to tax? Isn't assessing/collecting rates a Local Authority and not a Civil Service issue?
 
I thought so too but it appears the valuations are done by a central office, which kinda makes sense as it keeps these independant of the LAs who would have an interest in the actual valuations, and avoids duplication across each LA. I had a good look for the story but can't find a link. I rather hoped someone would fill in the blanks of the rather sketchy details I provided.
 
The Valuation Office is the government department responsible for assessing commercial properties for business rates. The rateable value is based on the rental value of the property at the valuation date.
 
Thanks for the replies folks but we've gone slightly off topic. Any answers to the original questions ?
 
I have an american friend who owned a house in Florida and a bit of a whizz at this stuff. He now works in California which is 8 hrs behind us. I will send him an email and come back to you. He should know specific locations well and pitfalls. Let's hope he is in work today.

S
 
I spoke to my friend.

JohnnieKippe said:
To people with rental properties in Florida

How easy is it to rent out properties there ?
How many weeks per year do you generally rent out ?
Does the money you get cover the mortgage ?

Thanks
Click to expand...

- Properties in the right location are easier to rent but come at premium, generally the further south you there is more demand as these area are more attractive to buyers and tourists alike. On the west coast good areas are Datona, Miami, Ft. Lot. On the East Tampa, Naples etc. Parts of Downtown Orlando might be good close to areas of employment. The main market there is tourists and old folks that go there for maybe six months a year. My friend has a mate who bought into a condo complex in a south coastal location and has had good tenants through a management company and the rent is covering his mortgage plus cost. He thinks property tax around 1%. there is no income tax in the state of Florida although he is not sure if that applies to non-resident investors.

- He couldn't say how many months a year you might get in tenants and this would largely depend on what market you go for i.e. the old folks on 6 month rentals, locals that work there or holiday makers. He has a friend who's house was destroyed by a falling tree during a huricane as inland as Orlando. He suggested a new high-rise apartment block would eliminate the huricane damage risk.

- It's hard to really say would the rent cover the mortgage as it would depend on the borrowerings and achievable rent in a given area and of course the number of months you get in rent. It's down to the usual location location location.

Some other interesting points:

- Most employment revolves around tourism, home building. There is lots of land to build more houses so house building should remain popular. He said there is lack of good jobs there and not much other industry.

Hope this helps!
 
The level of property tax mentioned here only applies to the house if you live in it.
If the house is rented out then the tax is almost double.
My friends (in Florida) pay 5K on their own and 8.5K for the identical one next door that they own and rent. The houses are valued at 400K to 450K
 
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