PROPERTY: Florida, a small paradise for investors

If there are countries where it is good to invest, Florida is undoubtedly one of them. Attractive taxation and growth, the "Sunshine state" has everything to please.

Florida is one of the most pleasant states in the United States. With an average annual temperature of 26°C and a coastline of 1930 km (excluding the islands), it is for this reason that the American peninsula is known as "Sunshine State". This plains region offers a preserved nature like the Everglades as well as large and dynamic urban centres.

In Orlando, Tampa, Fort Lauderdale and Miami, investors are regaining control of this state, which the 2007 subprime crisis had heavily affected. Today, Florida attracts Latin American and European investors (Germans, French and Belgians).

Buyer favourable legislation

If Florida attracts so many foreigners, it is because the tax system is lenient, especially for the French. Not to mention the advantage of a strong Euro against the dollar (€1 = US$1.11), the tax treaty signed by France and the United States in 1994 facilitates access to property. Among the measures announced by the agreement: the end of double taxation.

The buyer is therefore subject only to the legislation of the State of Florida, a godsend to many senses. He must therefore pay the local property tax (1.5 to 2% of the estimated value of the property by the city, always lower than the purchase price). It is of course subject to income tax in America, knowing that taxation is calculated on real income. In addition, the law requires that the purchase price be amortized over 27.5 years. Maintenance work is deducted from taxes, the owner benefits from a 10% discount and a refund of the price of a round-trip ticket to France (per year). Finally, in the event of resale of the property, 15% of the capital gain is taxed in the United States (compared to 19% in France for a capital gain of less than €50,000).

It should be noted that in Florida, the property owner is also very protected by law, which represents a major asset in the perspective of a rental investment. Thus, in the event of non-payment of the rent, the tenant is evicted within 45 days. Leases are renewable annually, which means that the rent may have to be renegotiated.

A simplified purchasing process

To begin with, the future owner is not required to have a green card to acquire a property on American territory. On the other hand, it will be necessary to pay a deposit of about 40% of the amount of the investment and to have cash reserves equivalent to 12 months of expenses (interviews, taxes...). It is therefore preferable to have a bank account on site.

The United States uses a real estate database, unique for each state, accessible by all real estate agents. Thanks to this system, the Multiple Listing Service, the buyer will not need to consult several agencies to find a property because they have access to the same list of ads. In Florida, the real estate agent represents the buyer throughout the buying process, so it is important to choose the right agent. Another positive point: the agency fees (generally 6%) are the responsibility of the seller.

Prices are still attractive

Prices have fallen sharply because of the subprime crisis. Although they have since increased each year and appreciated by more of 28% between 2009 and 2019, investing in Florida remains very attractive for Europeans. As a direct consequence of the crisis, it is still possible to find a property at a discount price, through Short Sales (short sales) or Foreclosures (foreclosure sales).

On average, the square metre costs 1616 € in Florida compared to 2040 € in France. Prices can vary from event to double depending on the city to exceed 11 000 € per sqm for prestigious properties in some areas of Miami such as Miami Beach. However, this is still lower than the prices encountered on an equivalent market in Paris or on the French Riviera. The prices in Miami County range from €2200 to €9000 per sqm for cities like Coral Gables and Key Biscayne, and from €1140 to €3200 per sqm in cities like Aventura.

Miami is booming and the investments are significant. The 170 or so projects undertaken as part of an urban development project have led to its renaming into Miami 2020. New programs are multiplying, especially in neighbourhoods like Brickell Height, while the population is constantly growing, making the city very attractive for rentals. The world leading cruise port, it has the highest double-digit growth rate in the country and is undoubtedly a dream come true for investors.

Other Florida cities also have something to delight future buyers. Orlando, the leading tourist city in the United States (with 60 million tourists each year) is experiencing record growth and prices are even lower than their pre-crisis value. In several Florida cities, prices have increased this year, such as Orlando (+10%), Jacksonville (+10%) or Fort Lauderdale (8%). Experts believe that they are not at their highest level and that it is still very interesting to invest in these sectors.

The resale of a property still allows you to realize a nice capital gain while the rental yield is around 7%. Prices in Florida have still not returned to their initial level and the territory's economic growth is strong, making it an excellent investment location.


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