Planning on buying a villa soon

[Rushton50]

You guys no doubt have answered a lot of this with others in the past and would appreciate any help and advice in this area.
We will soon have £20,000 deposit to procede with and intend to take out a US based mortgage for tax reasons we were made aware of and what has really started our plans off is that programm a place in the sun and the more recent one where it shows the brits have gone to florida to work and set up homes.

Our interim plan is for :
3/4 bedroom villa with pool and usual comforts of such a home.
Location: not decided, but may greatly depend on lending ability we will get.

The sort of things we now need to know is property management companies that wont rip you off and by that i mean, the year before last we stayed in a villa and the pool light needed replacing as it was reported by previous people. They sent a man who did the job for a side line ( moonlighting job) replaced the bulb, still didnt work, replaced the fitting and bulb, still didnt work came back the day after did something else and still didnt work , but then tried the fuse and it worked, but left the new bulb and housing in and we think would have charged them for it.

We also need to know what to expect when we approach a US mortgage company...if we apply for a $130,000 are we guraranteed to get it? or is it means based as uk mortgages?

We know our sucsess in renting it to holiday makers will depend on villa location, but what would the worst case scenario be if we had a reasonable location with reasonable facilities and so on? i couldve worded this better cos you are going to say reasonable...lol

anything else you might think we need to know would be a great help.

thanks
we appreciate it.

[Harmony]

A Place in the Sun also started us in thinking of buying a villa in Florida, but the program gave us no idea of the problems.

Firstly I would recommend you consider the financial side very carefully. I presume you are going to be dependant on rentals for income but can you cover costs if rentals are not forthcoming? If the answer is no I would question the wisdom of purchasing at this time. Remember even without rentals you'll need to pay Property tax, intangable tax, maintenance fees, utilities,

I'm not an expert on US mortgages but I believe the most they will lend you is 70% of the purchase price. If you purchase a villa without furnishings then you need to allow at least $10,000 (usually more depending on quality). There is a glut of 4 bed villas so a 3 bed might be better.

Management companies vary greatly but you can have some reassurance if they belong to the BBB. With regard to location you don't want to be much more than 15 minites drive from Disney. Sites with a view are always popular but come at a premium price, as do sites next to Golf courses. For us the main point was a location we were happy with as it is after all our second home.

We love our home and do not regret it's purchase. We enjoy the marketing of our villa even although it has become a second job. However the worst case scenario for us would be if we had a protracted period without rental we could reach the point where we would be forced to sell.

I'm sure others will give you more advice, and we wish you well in your endevour.

[esprit]

With 20% down, it will be means based. They do not take rental income into consideration on an 80% mortgage and look at your disposable income here to ascertain if you can cover the mortgage payments. I think 80% mortgages have become more difficult to get than they were. Most of villa owners now have non status mortgages which are not means tested but you need to put a minimum of 30% down. £20,0000 is really not enough to be working with. Remember your closing costs can add up to $5000.
If you try for a non status mortgage with a deposit of £20,000, you will be limited in areas you can buy. You can get 2/3 bed homes in the $100,000 to $120,000 price range in the older areas. Look at Buentaventura Lakes, Poinciana, Indian Wells, Hamilton Reserve. For around $130,000 you can get homes in Indian Ridge and Lindfields. Have a look at www.realtor.com and you will see what you can buy for that sort of cash.

[chris]

With a mortgage you usually need to have 6 months worth of repayments in an 'escrow' bank account to prove that you will keep up the repayments. If you cant afford to keep the house if you had 6 months with no rental income forget the idea. I usually reckon on bills excluding mortgage to be in the region of $1000 a month. (You have rates, water, insurance, management fees, pool, lawn, pest control to pay to name but a few).
Resales are really worth looking at, and may even have some rentals in place. (Though I bought one advertising that it had rentals in place only to discover the people had been moved into other homes run by the old management company).
For management I would aim for a smaller firm. That way they treat your home individually. In my case, the MC employs 1 cleaner, except if there are too many changeovers in one day for her to cope with, and so she knows exactly what is in each home so would notice immediately if something was amiss eg if the PS2 went walkies. My next door neighbour is selling his home for about $130-$140 000, a 3/2. Contact me if you want his details.

[fiona]

We have a 4,3 bought in October 99, and I allow $2500 per month to cover all out-goings and put a small amount aside for any problems, AC, pool heater, roof etc.