Why I’m considering selling my Florida property
Before the US economy crumbled in the 2008 crash Florida was an attractive investment for UK buyers. In the three or four years prior to the crash the sunshine state was a hotbed for those purchasing for lifestyle or investment purposes.
A Pacific storm brewing
Back then the exchange rate was in the region of 1.8 dollar to the pound, even using up to around 2 dollars to the pound. This effectively meant that US property was ‘half price’ for UK investors making it a very attractive proposition but then…
…the sub prime mortgage crisis in the US lead the economy ‘over a cliff’ and the market crashed seeing the value of Florida property tumbling to about half of what it once was.
This lead to a difficult situation for many investors facing negative equity and being forced to foreclose on a mortgage worth more than the property.
The clouds are lifting
Fast forward and in the past eleven or twelve years owners who were able to hold on to their property now see prices approaching pre crash levels in some areas. Florida is seeing a 4-5% growth rate per annum in many regions. Many of the foreclosure properties have been bought and as supply and demand have steadied prices have continued to climb.
For owners of property in Florida based in the UK who bought before the crash now could be an advantageous time to consider selling – Why?
The power of currency movements
Back around 2006 the pound was very strong against the Dollar. Today, with global events such as Brexit, President Trumps ‘America First’ Policy and the relative strength of the US economy, the pound has weakened against the Dollar significantly. So now the dollar value of your property is significantly higher when transferred into Pounds.
If you bought a property in Florida in 2008 for $260,000 your cost in GBP would have been approximately £140,000(at a 2008 average of $1.85)
If you were selling your Florida property today at $230,000 your proceeds in GBP would be approximately £175,000(at current $1.31 levels)
So even though you would be selling at a reduced price, because of the currency gain, you would be receiving more back than what you put in to the property in GBP.
Get specialist advice
If you are considering selling I’d advise talking to currency specialist such as Clear Currency
A currency specialist can give you historic pricing data. So you can identify the exchange rate at the time you bought the property. They will then help you work out what gains you will make due to the currency market (on top of the improved housing market). In turn this helps you set an accurate sales price. For example you might be able to set a keener price for a faster sale while retaining a healthy profit.
A currency specialist will also be able to guide you through the process of getting your funds back into the UK. At Clear we have helped hundreds of UK owners buy and sell property in Florida, our advice and experience helps circumnavigate potential issues when transferring funds out of the US. As property owners we want the process to be easy and simple. Getting expert advice should make the process as stress free as possible.
My top tips
Here are my top tips for anyone considering selling their property to take advantage of the currency position:
- Make sure you are working with a member of the (British based) AIPP who are accredited property specialists that you can trust as they have signed up to obey a strict code of conduct. Search for a member via the button at the top of this page.
- Do your calculations: bear in mind the costs of selling your property. Sales commission that the Realtor will charge is high in the US (6% avg). Your Realtor should be able to show you an example Closing Disclosure statement that will detail all expected costs for you as the seller and the buyer. You can only see the official document 1 day before settlement so it must be remembered that an example will only ever be a guide.
- A currency specialist can guide you through the process and advise on ways to minimise the risks involved in any transaction. You might be able to set a keener sales price for a faster sale while retaining a healthy profit.
- Prepare for closure. Can your realtor and title company close remotely, with you out of the country? What will be your closing date.
- Be aware of The Patriots act. Depending on who you bank with in The US, The Patriots act can place some restrictions on your ability to transfer funds outside of US unless you are physically there – you may be able to circumvent this depending on your bank. One option is to have the title company transfer the funds via a currency specialist to your UK account. Ask as many questions before hand to make sure thats possible
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