SPAIN TWINNED WITH FLORIDA?

As we move into the final quarter of 2006 most financial pundits predict yet further interest rate hikes in the UK.  This has led to a slowing down in the property market.  Fortunately for those of you with properties in the UK this should not be a problem. 
The rental market remains fairly constant and even if the market were to dip this should not affect income in the short to medium term.  Of course as far as the UK is concerned income generated from property rental tends to be through long term letting not the holiday market.
Some foreign markets are already dealing with a fall in both property values and rental revenue and the greatest of these is the USA and Florida in particular. 
Like Spain over the last five years Florida has seen house prices rise year on year as much as twenty five per cent per year.  It has always been seen as a prime location for holiday rental revenue with potential for year round business.  It is a great draw too for those retiring, with its easy pace of life and great climate. 
So what has happened in 2006? It appears that both sides of the Atlantic have succumbed to a period of re-alignment.  The previous few years saw prices rising quickly on resale houses and new properties were springing up in their thousands also with ever increasing price tags.  The reason most would agree was profit hype.  It was only a matter of time before the bubble burst and a period of re-alignment stepped in.  The slow down here in Spain has been just that, a slow down.  In Florida some properties have been on the market for over a year. 
Developers in both camps have felt the pinch as well and the down turn has meant that there are deals to be made.  For those with a speculative eye and a patient hand this could be just the time to buy and hold on until the tide turns thus producing a healthy return.
It remains much rosier for those who have retired or are residents.  The last few years of growth have improved capital gain substantially and the current hiccup is of no consequence in the short term.  Once the levelling out has finished the market will pick up again. 
On the rental side Spain fairs better, rentals have remained fairly constant.  For Florida the ever increasing fuel surcharges and the unbelievable cost of the major attractions such as Sea World and Disney World have conspired to make Florida less attractive to holiday makers.
For most then the reality of owning a rental property is a happy one as well as being a good investment, unless of course your circumstances change.  Originally the purchase may have been to use the property for family holidays and then rent it out at other times.  However if rentals do not go according to plan or personal circumstances change, what may have seemed like a viable investment can end up feeling like a millstone and a money pit. 
Whatever the reason; if you are thinking of selling this year remember previous years has conspired against you at the moment.  It is a changed market, there are lots of properties for sale and it may be some time before the right buyer enters your house.  Price the property correctly (see the article by Vince Barnes in last issue of Inland Trader).  If you can hold on until the market settles, this will reduce the stress that is always involved in selling and you may get the price you want.
On the upside unlike Florida here we do not have such heavy overheads.  Taxes on properties in Florida can be a real burden.  Apart from the obvious, general maintenance, insurance and normal community charges there is a tangible property tax applied to furniture on all rental properties.  In the course of a year this can be in excess of £3000 per annum, far greater than here.
Spain has at least one more plus over the Sunshine State across the Atlantic. No hurricane season! 
If you have any queries about this article or any Money Matters queries contact Ann on 661003324, email This email address is being protected from spambots. You need JavaScript enabled to view it..  If you have personal questions for Ann you may contact her via Big Attitude PR on 661757433, email This email address is being protected from spambots. You need JavaScript enabled to view it..

Additional information