“It was in great shape and just needed a cosmetic make-over,” says Gray. After buying it, she quickly had customers: a full house of paying guests in April, before a good summer and bookings for the first half of 2025 from wintering ‘swallows’ from the northern US and Canada.
Costs to consider
The high occupancy rates and low tax burden are balanced with the heavy running costs of Floridian homes. Transaction costs were 5pc, and mortgage rates were hefty at the time they took out a 30pc loan, at 11pc. Rates have since reduced to around 8.5pc for foreign buyers, with a 70pc to 75pc maximum loan to value ratio.
Her 30-year fixed rate deal is fairly typical so she will aim to refinance in a year or two – this is easy to do without hefty early repayment fees. By the fourth year, the mortgage can be redeemed in full without any penalty, says Ben Attwood, a mortgage specialist at Serhant.
Other costs to consider are Insurance and local tax (the equivalent of council tax), which Gray pays with the mortgage. “These could be in the region of $2,000-$4,000 and $5,000-$7,000 respectively,” says Attwood.
Insurance premiums are high in Florida – and may well rise higher as hurricanes become more extreme because of climate change. Florida’s office of insurance regulation puts the average household premium in Florida as $3,600 per year, far higher than the national average of $1,915. Where the property is a short-term rental investment, the owner is advised to have liability insurance protection too, which can lead to higher than average premiums.
Typically US house insurance treats hurricane damage as a “wind event” while flooding is usually covered by a separate policy. After Milton, many homeowners on the coast did not realise they were not covered by a flood policy.
Other costs to consider include local tax (the equivalent of council tax), which Gray pays with the mortgage. “These could be in the region of $5,000-$7,000. Owners then need to take into account local tourist taxes, property management fees and maintenance/wear-and-tear costs,” says Attwood. Home Ownership Association fees are payable in a resort for the upkeep of amenities, and Gray is paying $1,500 per year.