ORLANDO
Florida remains a property market in shock. Well over half the total sales in Orlando and 25-50 per cent in the state as a whole are of distressed properties, either foreclosures, or short sales (where the owner is selling at a price that doesn’t cover the outstanding mortgage). That compares to 25 per cent nationally – still a frightening statistic by UK standards. And according to Stirling Sotheby’s International Realty, 50 per cent of all closed transactions are for cash; credit remains very tight, and very difficult for non-US buyers to source in the US. Torcana International quotes figures showing a 75,25 split between UK cash and financed buyers. For the cash buyer, though, it’s an
attractive market. Properties can be bought for as little as USD 50,000, and can generate net yields of seven per cent or more. For instance, Torcana is marketing properties in Siesta Largo at USD 70,000 with an eight per cent yield – these properties would have sold for USD 200,000 before the crash; Property Frontiers has one bedroom apartments in Naples available for
DISNEY WORLD
Left: Who’d live in a house like this? Well only a Disney princess... but your clients can have a palatial home for practically peanuts.
USD 55,000, at 7 per cent yields. David Cox says that “Net yields vary from seven to 12 per cent with eight to nine being a realistic average.”
Rents, yields and taxes Alternatively, Property Frontiers has townhouses in Orlando available for holiday lettings, rather than buy-to- let, with a net income of nine to 13 per cent based on their current 65 per cent occupancy. That level of yield is higher than
MIAMI
can be enjoyed on comparable assets (such as equities or commercial property) and enables investors to take an adequate return while awaiting the recovery of the market. However, investors need to take into account local taxes, as well as homeowners’ association charges, so the optimistic gross yield numbers quoted by some enthusiasts are somewhat misleading. Rents have fallen over the last few
Left: Miami Nice...Wonderful waterfront homes complete with palm trees.
years, in line with prices. However, David Cox says, that may be stabilising now. As more and more rental properties came on the market, through new developments coming on stream and through
PROPERTYdrum MAY 2011 47
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