Two years ago, the American property market was booming. Savvy investors who picked the right location and parted with their cash at the optimum time were walking away with massive capital returns.
In some areas of Florida, property values increased by more than thirty per cent over a 12-month period. But all good things must come to an end, and in recent months American property has no longer represented the sure-fire investment of happier days. Thanks to the well-publicised strength of the pound against the dollar, most of us are aware that the US economy is weakening, and this is having a knock-on effect on American property.
“The message to those hoping to invest in the States is to hold off,” said Stuart Law, managing director of Assetz, last month. “It is not yet clear how severe the downturn in the economy and the currency will be, so investors should avoid being tempted by currently high-profile advertising and marketing on US property.”
So what is the message for those hoping to buy a home in Florida? Should they hold off, or is it still possible to invest safely if you know where to look?
Suzanne Morrill of World of Florida says that it all depends on your intentions. “The current market favours those who are in for the long-haul,” she advises. “People who bought two years ago and were hoping to turn around their property quickly are the ones who have suffered – but if you are looking at a turnaround period of more like three to four years then you should see a return on your investment of around 5 per cent per year.”
Another expert who believes that the outlook for Florida property isn’t all negative is Andrew Bartlett, an independent property and relocation consultant.
“With the dollar so low against the pound at the present time and the Florida property boom coming to an abrupt end last year, the opportunity to pick up a bargain property in Florida is better today than it has been for several years,” he says.
Just make sure that you pick the right location. “The area around Disney is always going to be popular,” says Morrill. “And if you are buying on the coast, then try to find a property as close to the water as possible. Property with nearby attractions such as golf-courses etcetera are also a good bet.”
Bartlett agrees that the location you choose will have a huge effect on the value of your Florida property investment. “There are areas of Orlando and Rotura at the present time which are saturated by property owned by Brits, who have found themselves in an area surrounded by other investors where prices are declining in value. “It is worth obtaining impartial advice at the very start of the process as to what areas and what type of properties will offer the best investment potential.”