BUYING AN APARTMENT IN FLORIDA: FOLLOW OUR GUIDE

 BUYING AN APARTMENT IN FLORIDA: FOLLOW OUR GUIDE

Buying an apartment in Florida is a project many investors pursue each year. Whether for rental purposes or simply as a second home, a few steps are essential to your project.

First, it should be noted that in this guide we will be dealing with the most common type of apartment in Florida: the condominium or condo.

Indeed, this is a specific type of property that is very common in the United States, particularly in Florida. In this type of purchase, there are many things to consider before making the purchase.

A condo is, in short, an apartment in the common sense. This is essentially its legal description and how the property is registered.

If you live in a multi-unit building, you essentially own the airspace between the walls and ceilings of your unit. You have common walls and common grounds that you share with the other unit owners.

Not all condos are located in high-rise buildings; some may also be stand-alone units. This is why it's important to pay attention to the legal description. We'll see later how the legal aspect is fundamental in this type of property.

Let's take a look at this together through our 4 steps before buying an apartment in Florida.

buy an apartment in Florida

Step 1: Define the budget to buy your Condo

Determine an overall budget

As with any purchase, one of the first steps is to work on your budget.

What is meant by budget?

This is why it is important to be aware that the budget does not only involve the purchase price.

There are a few additional things to consider when establishing your affordability.

Here is a non-exhaustive list of additional costs that we don't necessarily think about:

Title company fees: approximately 2% of the purchase price

Possible LLC formation fees: depend on your situation, number of partners, and customized shareholder agreement. This can amount to several hundred dollars.

All the costs inherent in the operation of the condominium: read on, we will go into this in more detail

Provide an “additional” envelope for any third parties who may be involved during the acquisition: advisors, insurance, etc.

The objective at this stage is to consider all hypotheses to avoid unpleasant surprises and unanticipated costs.

The building questionnaire

Anyone considering buying a condo should know what a condo questionnaire means.

This questionnaire is a set of questions designed to assess the building's financial stability. Essentially, it's a general assessment of the co-owners. For example, how many co-owners are in default and not paying their contributions. We'll come back to this later, but the failure of some co-owners impacts the building's community.

The questionnaire also seeks to determine foreclosures, the number of units owned by an individual or company, the building's reserves and the number of units rented.

But then, what is the practical use of this questionnaire?

The condominium questionnaire is used primarily in financing to help mortgage lenders determine risk. The greater the risk, the more money they will need as a down payment.

Be careful, even if you're looking to buy a condo in Florida with cash, paying for a questionnaire is a good idea. This gives you a good overview of the building's financial situation.

Our advice is to approach your condominium like a small business. Before purchasing a business, you must ensure its financial health. You also certainly wouldn't want any criminals inside.

Financing the purchase of an apartment in Florida

Obviously, financing in the US is always a recurring issue. Two scenarios are possible at this stage.

You want to buy cash, so you don't have to go through a lender. The process is quick and simple; you can become a homeowner in less than a month if all goes well.

Second situation: you want to leverage your banking resources. Here again, there are two possibilities: you are a foreigner but a resident of the United States with a credit score and Social Security number. You are a non-resident foreigner and therefore have no history in the United States.

In both situations, financing is possible of course, the first situation, that of the resident, is ideal and simpler.

In the second situation, it's difficult to say that you'll always be financed; unfortunately, quite the opposite! There are two reasons for this: you're a foreigner and represent a risk for banks. However, depending on your financial situation, your cash flow, and the market in which you invest, your chances vary.

As you can see, many factors come into play, making it difficult to make a general statement on this subject. The best thing you can do is contact a broker who will provide you with the assistance you need. They will also tell you from the start whether your project can be financed. There are many of them, and we recommend using brokers who are experienced in working with foreigners.

Also since the last housing crisis, buying a condo in Florida with a mortgage comes with a set of loan requirements.

By far the biggest requirement is the amount of money required for the down payment.

Finally, as we have seen, the results of the questionnaire influence the conditions of the loan.

You can always ask your real estate agent to check with the listing agent to see if they know about the property's financing. Or pay for a questionnaire in advance, before writing your offer.

Getting financing for your purchase? A French-speaking expert will help you for free.

Step 2: Buying an apartment in Florida, what does it involve?

This is the part that differs most from a traditional purchase, for example the purchase of a detached house.

Condo Covenants: More specifically, the rules and conditions that govern the building where your apartment is located. The intention was to establish uniformity and order within the community.

It is ESSENTIAL to find out about this before you close the sale! You need to know what to expect before you become a homeowner.

If you choose to own a condo, there will be rules to follow. Can you imagine a shared space where everyone can do what they want, when they want? Some of the rules you can expect will concern pets, when work can begin on your unit, and rental requirements.

Some of the rules may not be to your liking and others may seem too lax...

In recent years, the state of Florida has tightened laws regarding condominium associations and their governance actions.

It may also be in your best interest to get some neighbors' opinions on life in the building. Dissatisfied people will be the first to speak.

Find out about the company that manages the condo! It's quite easy to find a lot of information about companies these days on the internet. Get an idea of the company's reputation.

Remember that you will be paying monthly for building management, which is also a cost you need to consider. In fact, monthly fees are payable for building management.

Step 3: Identify the area where you will purchase your future apartment

Identify the market that may interest you. Once again, it all depends on your project and the conditions under which you are going to acquire.

For example, will the purchase be solely a second home? Or, on the contrary, do you want to rent out the apartment for at least part of the year?

Therefore, depending on the project, the elements to be studied will be different, we can nevertheless list a certain number of conditions to be analyzed:

Does the market and the property meet your budget?

What are the building management fees?

Proximity to transport, airports

Proximity to beaches: one of Florida's obvious assets

Whether it's the East or West Coast, there are some commonalities. The waterfront is always more expensive, as are management fees. Peak periods are also much longer. Restrictions are also much stricter.

A typical example is Miami, where many buildings prohibit rentals.

Also, big cities will have higher taxes.

Also, be careful not to follow trends too much; there are sometimes announcements about development areas with large buildings that are being built. Form your own opinion about the ideal area for your purchase.

A French-speaking expert will advise you. Book a free, no-obligation consultation.

Step 4: Be aware of the issues after purchase 

Renting an apartment in Florida

If you're looking to buy a condo in Florida to rent out, consider the demand, rental rates, and any rules that may restrict your use of your apartment.

Legal restrictions apply, as does the law, but also restrictions inherent in the organization of the building. Many buildings, for example, prohibit Airbnb rentals.

For example, we have restrictions on condominiums that will allow one-year rentals, but only after one person has owned the unit for two years.

Although the condominium building may allow rentals, check the rules for minimum stays. Most condominium buildings that allow rentals will not tolerate daily rentals. And some may even require your tenant to be approved by the association before allowing occupancy.

If your building has this approval restriction and you don't comply with it, they have the right to evict the tenant and fine you for breaking the rules.

Managing your property 

A fundamental element if you're investing, especially for rental purposes. Property and tenant management.

And here, we are only interested in the most common situation, namely you are at a distance but you wish to rent your property.

This is where choosing a rental management partner is FUNDAMENTAL. This is especially true in a condominium-style property.

Since the manager will be dealing with the condominium association.

Some simple tips before choosing your partner:

The manager must have experience in specific condo management.

It must be deeply rooted in the sector.

Transparency in fees and conditions of the management contract.

A French-speaking expert will advise you. Book a free, no-obligation consultation.

As you may have noticed, buying an apartment in Florida requires a number of steps before taking the plunge.

As always, we recommend that you seek expert assistance.

Finally, buying a condo in Florida is one option among others, as a single-family home remains an investment that offers many advantages.