International Home Investor – My US Holiday Home

A number of years ago, before I had learnt anything about making good decisions when buying investment property, I took a liking to buying a holiday home in Florida. As a family, we had visited many times and stayed in a range of half decent hotels which did not always augment the holiday experience.

On the death of my father, I came into a tidy sum of money so we decided to combine another family holiday in Florida that August with an exploratory house hunting trip.

We did some preliminary research into overseas property investment particularly those UK companies who had a range of properties for sale in Florida. We narrowed the field down and decided to trust in an Essex based company who found us free accommodation in a lovely house during our 7 day stay in the Orlando area.

Come the fateful day, their local sales person arrived to drive us around the various properties from various international home builder companies that we had identified as being of interest to us. Some were just plots of ground marked out with red and white tape and others were full building sites, but, despite the fact that it was a week day, no-one was actually working on any of the sites. Maybe this should have started some alarm bells ringing?

He then took us to a perfectly lovely resort and we sat down to have a drink and a chat about what we had seen so far. There was a lovely pool nearby and our two kids took the chance to have a dip and cool down while we sat and talked through our options. Neither my wife nor I was all that enthused about what we had seen with regard to new build properties so he then hit us with the sucker punch. “What about here” he said, “There are resale properties here, but you did not indicate that you would be interested in resale’s!”

He then trooped off to reception and grabbed a couple of room keys and took the four of us on a mini tour of the resort before showing us a couple of apartments that were similar to those that were up for sale. We were very impressed with the look and feel of the properties and the whole resort so, at last, we had something to really think about.

He then took us back to our holiday villa and said he’d call in a couple of days to see if we’d made any decision. Sure enough three days later, on Thursday, he called and asked what we wanted to do and we told him we were interested in the property at the resort, but wanted to see the financials before we made a final decision. He said he would come round the next day, Friday the 13th, and take us back to the apartments and would go through the “full” financials so that we could make a final decision.

On the Friday we went back to the resort and sat down to talk numbers. He outlined the cost to buy, the legal charges involved and other costs associated with the purchase which was what we had been led to expect and were within our budget. He then pulled a “secret” document from his case which he said was the next two years forecasts from the management company and showed us that we would be making loads of money from rentals due to the room rates and the predicted occupancy rates. This all looked too good to be true so we decided to make our judgements based on figures we had been given independently, but even these seemed to indicate that the purchase would be self sufficient within a couple of years.
At this point we said yes to buy an apartment there and chose a ground floor one near the lake which we had viewed on our previous visit. We drove away happy in the knowledge that we were buying a good property in an excellent resort.

That evening, one of the biggest hurricanes for a number of years came through the area which maybe should have warned us, but we persevered on and eventually became the owners of a beautiful apartment.

Since then, we have suffered the biggest property value drop in years both in the UK and the US so our investment is not now looking so good financially, but this all evaporates when we travel to the resort and have a thoroughly brilliant time in the sun out there. Rentals have also dropped off so, although the bills for the apartment and management fees are covered, the mortgages have to be mainly met from our UK funds.

Mind you, I would like to meet the person with the “secret” information as I have a special place reserved for him for that paperwork. Despite him and his information, I am glad I took the plunge to become a global homes investor as we all enjoy the peace and relaxation there in between the madness that is usual for Florida!

Dave P Thomas