Several years ago, before I had learned anything about making good decisions when buying an investment property, I liked buying a vacation home in Florida. As a family, we had visited many times and stayed in a variety of halfway decent hotels that didn’t always add to the vacation experience.
Upon my father’s death, I came away with a nice sum of money, so we decided to combine another family vacation in Florida that August with a home-hunting scouting trip.
We did some preliminary research on overseas property investment, particularly those UK companies that had a variety of properties for sale in Florida. We narrowed the field and decided to trust an Essex based company who found us free lodging in a beautiful home during our 7 day stay in the Orlando area.
The fateful day arrived, their local salesman arrived to take us through the various properties of various international homebuilders that we had identified as being of interest to us. Some were just land marked with red and white tape and others were entire construction sites, but even though it was a weekday, no one was working on any of the sites. Perhaps this should have set off some alarm bells?
He then took us to a perfectly lovely resort and we sat down for a drink and a chat about what we had seen so far. There was a beautiful pool nearby and our two children took the opportunity to take a dip and cool off while we sat and discussed our options. Neither my wife nor I were that excited about what we had seen regarding new build properties, so it hit us hard afterwards. “What about here?” she said, “There are resale properties here, but you didn’t indicate that you would be interested in resale!”
He then headed to the front desk, grabbed a set of room keys, and took the four of us on a mini tour of the complex before showing us a couple of apartments that were similar to the ones for sale. We were so impressed with the appearance of the properties and the entire complex that we finally had something to think about.
He then took us back to our vacation villa and said he’d call in a couple of days to see if we’d made any decisions. Sure enough, three days later, on Thursday, she called and asked what we wanted to do and we told her that we were interested in the property at the resort, but wanted to see the financials before making a final decision. He said he would come the next day, Friday the 13th, and take us back to the apartments and review the “complete” finances so we could make a final decision.
On Friday we went back to the resort and sat down to talk numbers. He described the purchase cost, legal fees involved and other costs associated with the purchase, which was what we had been led to expect and was within our budget. He then pulled out a “secret” document from his case that he said were the management company’s forecasts for the next two years and showed us that we would make a lot of money on rents because of room rates and projected occupancy rates. This all seemed too good to be true, so we decided to make our judgments based on figures that had been provided to us independently, but even these seemed to indicate that the purchase would be self-sustaining in a couple of years.
At this point we said yes to buying an apartment there and chose one on the ground floor near the lake that we had seen on our previous visit. We walked away happy knowing that we were buying a good property in a great resort.
That night, one of the biggest hurricanes in several years passed through the area and maybe they should have warned us, but we persevered and eventually became owners of a beautiful apartment.
Since then we’ve had the biggest drop in property values in years, both in the UK and the US, so our investment now doesn’t look so good financially, but this all evaporates when we travel to the resort and had a completely brilliant time in the sun. out there. Rents have also decreased so although the apartment bills and management fees are covered, the mortgages have to be covered mainly from our UK funds.
Mind you, I would like to meet the person with the “secret” information since I have a special place reserved for him for that paperwork. Despite him and his information, I am glad I took the step to become a global home investor as we all enjoy the peace and relaxation amongst the craziness that is usual in Florida.
david p thomas