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Florida Property Prices On Two-Year Slide

February 11, 2009Article by Ray Withers

Orlando, the favourite US investment hot spot for Brits is far from blooming according to the latest Florida property price figures. Florida real estate prices fell across the board an average of 19.4% in the year ending December 31, 2008, according to analysts Zillow.com. This means property investments in Orlando have dropped every month since hitting a peak in June 2006. In real terms, the property now stands at the same value in Orlando as in September 2004, and since then almost 95% have lost almost 35% of their value, leaving thousands of investors in negative equity. In the past few months, more than a third of property owners trying to get out of the slump have sold their properties at a loss.

This includes developers with completed or partly constructed property on their hands that is now worth less than the land value and builds costs. A typical Orlando development is Cane Island at Kissimmee, just a few minutes from Disney and the major theme parks. The developers state that the current Kissimmee property market means selling prices are less than build costs for the apartments. They need to sell to cover development finance and this means some strong negotiation can net bargains. Just like the roller coasters at the parks, Cane Island resort has gone through ups-and-downs since launching in 2005 with prices starting from $319,990 for a 2 bedroom fully furnished apparent, the same size units today are selling for $149,990 an astounding 53% less. If prices were to return to 2005 levels an incredible 113% capital appreciation would be achieved.

These rent-ready apartments are already completed, 58 already let and managed by Amazing Vacation Homes. Cane Island comprises a luxury appointed resort comprising of 260 two, three and four bed apartments in a gated compound. The expected gross annual yield is about 14%. Offered by international property consultants Property Frontiers, with mortgages at 70% loan-to-value (subject to status), apartments are priced from $150,000 – $200,000. To buy, an investor needs to input about $58,000 in cash to cover the deposit and purchase costs. For your money, all of the apartments at Cane Island are delivered fully furnished as a turn-key development. Kitchens have a full-sized washer and dryer, refrigerator, microwave, glass-top range and dishwasher.

Amazing Vacation Homes Inc is the main rental management company at Cane Island. They currently have 58 of the apartments on their books and have developed successful relationships with established travel companies who are actively selling the resort. Their main client is Hotelbeds.com that is part of the TUI Travel Group that has a good international presence. In the UK, one of the leading TUI brands is Thomson Holidays Visit Amazing Vacation Homes Inc for more information about the management company. They forecast a 42 week season for the two and three bed apartments and a 34 week season for the four bed units.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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