Making high-yield real estate transactions today is not easy. The trend in financial markets in general and in real estate in particular requires a great deal of attention and caution in choosing the areas in which to invest and the best ways to make your capital yield organic returns (read our in-depth analysis on how to invest €100,000, €50,000 or €10,000?)
The United States now represents one of the best opportunities for real estate investment with a high ROI, especially in Florida, the state that currently boasts the best ratio of growth in interest to real estate value of housing units.
Why buy a house in Florida
Florida has long been considered the “retirement paradise” for VIPs and wealthy Americans and others. Its favourable climate, the presence of large international companies and its proximity to the sea make Florida a perfect place to live or to enjoy regular holidays, perhaps taking advantage of a villa or a flat as a base rather than the classic hotel.
The constant urban redevelopment means Florida’s cities are always welcoming and modern, full of services and activities designed primarily for an upscale audience.
Popular places to buy a house in Florida
Florida boasts some of the most beautiful and frequently visited cities in the United States. Tourism is favoured by the presence of the sea and some major attractions such as Orlando and its Disneyworld, which brings millions of people to visit each year.
Miami and Fort Lauderdale
The Miami area is one of the most famous on the coast and in Florida itself. A year-round destination for international high-end tourism, Miami is generally a place of refuge for the wealthy after they have finished their working years.
The climate is temperate or warm all year round, the coastline is well-equipped and the city has a wealth of services, venues and good business opportunities.
Fort Lauderdale is only a few kilometres from Miami and is the jewel in the crown of the coastline, thanks to its favourable position in relation to the Atlantic Ocean, which guarantees a climate that can be enjoyed more than 300 days a year, with temperatures that never fall below 15 degrees celsius in winter.
Tampa is a Florida city famous for its crystal-clear waters, which is why it is often preferred to large urban centres for both holiday periods and permanent stays. In addition, its metropolitan area is the second largest in Florida in terms of population density.
The Jacksonville area is famous for being the site of many military installations, which makes its economy robust and thriving due to the many related businesses that hardly ever experience any downturns.
Along with Punta Gorda, famous for its golf courses, it is also home to several Fortune500 companies, i.e. businesses that make it onto the list of the 500 most promising US companies in terms of annual revenue growth.
How the house buying and selling system works in Florida
Buying a house in Florida is very different from the steps involved in carrying out the same transaction in Europe. We are talking about operational differences, but also fiscal, bureaucratic and, of course, economic ones.
First of all the search system is different. In Florida there is a universal database of all properties for sale called the MLS [Multiple Listing Service]. All real estate agents work with this service, so it is not necessary to visit them all. Instead, it is important to seek the advice of professionals who know the area and who know how to find the right properties to meet the needs of both the seller and the buyer.
Ancillary costs, i.e. those related to notary, insurance, legal and other expenses amount to about 5% of the capital invested in the property.
If a suitable property is found and both parties agree, the buyer will pay a deposit even before signing the contract or making the formal offer. Only at a later stage will the agreement be signed, which is binding (net of specific clauses for possible termination) and is followed by a deposit normally worth between 1% and 10% of the agreed price. After that the Title Company, covered by the insurance company, will carry out a series of checks and insure the property against any possible third-party claims. Only then is the agreement finalised.
The timing of buying and selling real estate in the USA is crucial. Respecting the time frames is the only way to avoid unpleasant situations, such as the unrecoverable loss of the deposit.
Prices and taxation when buying a house in Florida
House prices in Florida offer a wide range of opportunities, so it’s possible to select investments as low as USD 50,000 and as high as seven figures.
What matters, apart from the capital to be invested in the transaction, is the relationship between the purchase price and the intrinsic value of the property, i.e. the potential that may – or may not – be adequately realized following renovation of the property and maximisation of future profit.
There are four levels of property taxation in the US: local, regional, state and federal. The income tax (which reaches a maximum of 35%) is the largest single tax in the US treasury. However, Florida is one of nine states that does not impose a personal income tax.
Here most of the revenue comes from sales and consumption taxes, mainly on property (about 1.5%).
Therefore, relying on a competent structure in terms of buying and selling real estate in the USA guarantees the investor the ability to avoid unnecessary costs and, above all, to comply precisely with all legal obligations, so as not to incur fines and penalties, which in the USA can also be quite onerous.