November 29th 2008
Fractional Freehold in Florida
I have been at a number of property shows recently where a number of Companies are offering single family homes in the Disney area of Florida for under £40,000. Sounds too good to be true but what exactly is fractional freehold?
What this means is that a number of buyers usually unknown to each other, buy a property outright. They basically share the investment costs, and the running costs under the same management company and come to some agreement concerning rental as each owner will have full ownership rights for the period that they own.
It is a method of getting into investment property in Florida but there are a number of pitfalls that you should consider.
Firstly what happens if one of the owners dies or can no longer afford their share of the running costs or if they have taken a mortgage to purchase their share what happens if due to a change in circumstance they can no longer afford the running costs?
It can become a bit of a nightmare and these are all points one should consider when looking for property.
Normally property purchasers in Florida don’t usually use an attorney as all Real Estate Brokers are licensed and regulated by the State, but iff you decide that fractional ownership is for you then whatever you do use an attorney. Not just any attorney but one that has passed the Bar examination in Florida even if the individual is a practising solicitor in the UK. Also make sure that the individual you are working with in the UK is actually a licensed broker or sales associate.
It may in fact be a safer investment to try and buy something smaller like a condo on a resort community. Bahama Bay is one such community where a fully furnished 3 bedroom 2 bath condo can be purchased resale for around £80,000 (£1=$1.5) in today’s market place. These condos are less that five years old and the resort has all the features that you need for both a relaxing holiday in the Florida sunshine and to keep the children amused and safe in this gated community. Better to stretch the extra cost with a mortgage or buy with a friend (but still have a legal agreement drawn up in Florida) and when the market picks up – and let’s face it house prices always recover 9in the long term perhaps look to use the profit as a down payment on that villa with its own pool that you have always wanted.
Whatever you do ALWAYS use a licensed real estate associate such as Florida Property Showcase (www.floridapropertiesshowcase.com) who have offices in the UK and Florida and ALL their sales team are licensed in the State of Florida whether working in the UK or Florida.
For a brochure on Bahama Bay, contact Florida Property Showcase
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