SINGLE FAMILY HOMES. Orlando Florida The leisure and lifestyle capital of the USA and much more

Transcription

1 SINGLE FAMILY HOMES Orlando Florida The leisure and lifestyle capital of the USA and much more

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3 The Florida market The USA property market collapsed in late 2007/early A primary cause was sub-prime borrowers who couldn t repay loans, another was the general collapse of the US economy. Prices in parts of the country such as Florida have stabilized and are now showing signs of recovery. Modern three bedroom, two bathroom freehold houses in good neighborhoods in Orlando with tenants in place and net rental yields of 5% plus can now be bought for under US$100,000. This is over 50% below the price at the peak of the market and is below replacement cost. In 2009/10 most banks were in urgent need of cash and so placed large number of foreclosed properties on the market. The need for cash has dissipated which has meant the supply of foreclosed properties in some states has steadily dwindled. This is the case in Florida, especially for single family homes. Rental demand for this type of property has remained good and since the state has an increasing population it is likely to see house price growth before and greater than states like Michigan. People need houses to live in and the basic laws of supply and demand prevail more demand means higher prices. All property markets recover in time and Florida will be no exception. Whilst it is virtually impossible to pick the bottom of any market, if you can buy within 10% of the bottom you will have done well. We are within that range now in Florida so now is the time to buy.

4 Florida Why - Central Orlando Florida? Great Local Museums such as the Orlando Museum of Art, Orlando Science Center, Orlando Regional History Center, International Trolley and Train Museum and several other interesting and educating local museums. Professional Sports - Orlando Magic (Basketball), Atlanta Braves Spring Training (Baseball) and a few minor league baseball teams within a 30 minute drive. The Atlantic Ocean and Beaches (45 minutes) and Gulf of Mexico and Beaches (60 minutes) Intracoastal Waterway, The country s longest inland navigable waterway that extends from South Florida to New York (40 minutes) St. Johns River, Florida s largest fresh water river, 310 miles (500 km) stretching from Indian River County to the Atlantic Ocean in Jacksonville (30 minutes) Superb shopping and is known as the Shopping Capital of the World boasting over 52 Million square feet (4.7 million square meters) of retail space. Ocala National Park - Florida largest state park with over 384,000 acres (154,000 hectares) with two major rivers and over 600 lakes and ponds (45 minutes). Other cities within minutes away include: Tampa, Daytona Beach, Cocoa Beach, St. Petersburg, Cape Canaveral, Melbourne and Clearwater. Over 625 lakes: great for boating, fishing, exploring and water sports. Over 300 golf courses John F. Kennedy Space Center (45 minutes)

5 Orlando Metro Area (Greater Orlando) The Orlando Metro Area in Central Florida includes Orlando City, and Orange, Seminole, Lake and Osceola counties The Orlando Metro Area had a population in 2011 of 2,184,763 making it the 26 th most populated metropolitan area in the US. The 2011 population figure showed an increase of 32% since 2000, and the population is continuing to grow, with a forecast population of 2,386,133 in According to the Census Bureau, Florida is forecast to be the third most populous US State by 2030, with more than 12 million more residents than in the year Three states- Florida, California and Texas will account for nearly a half ( 46%) of total US population growth between 2000 and The population of the Orlando Metro Area is both young- two thirds of its residents are under the age of 44- and well educated, with nearly a third having obtained a college degree. Orlando is home to NBA s Orlando Magic, as well as a professional ballet, philharmonic orchestra and touring Broadway series. The City of Orlando has a vibrant, downtown core including community venues: Amway Center, home of the Orlando Magic and the top ranked NBA sports facility, an under-construction Dr. Phillips Center for the Performing Arts and a soon-to-be renovated Citrus Bowl.

6 Orlando Metro Area (Greater Orlando) The Orlando Metro Area in Central Florida includes Orlando City, and Orange, Seminole, Lake and Osceola counties The Orlando Metro Area had a population in 2011 of 2,184,763 making it the 26 th most populated metropolitan area in the US. The 2011 population figure showed an increase of 32% since 2000, and the population is continuing to grow, with a forecast population of 2,386,133 in According to the Census Bureau, Florida is forecast to be the third most populous US State by 2030, with more than 12 million more residents than in the year Three states- Florida, California and Texas will account for nearly a half ( 46%) of total US population growth between 2000 and The population of the Orlando Metro Area is both young- two thirds of its residents are under the age of 44- and well educated, with nearly a third having obtained a college degree. Orlando is home to NBA s Orlando Magic, as well as a professional ballet, philharmonic orchestra and touring Broadway series. The City of Orlando has a vibrant, downtown core including community venues: Amway Center, home of the Orlando Magic and the top ranked NBA sports facility, an under-construction Dr. Phillips Center for the Performing Arts and a soon-to-be renovated Citrus Bowl.

7 Orlando Orlando has a population of over 2 million people. Its population has increased by over 15% since 2000 and it is the 26th largest metropolitan area in the United States. Two-thirds of its residents are under the age of 44, and nearly a third has obtained a college degree. Three states Florida, California and Texas will account for nearly one-half (46 percent) of total U.S. population growth between 2000 and 2030, according to Census Bureau state population projections. Orlando is one of the major tourist destinations in the USA and attracts over 51 million visitors in Its International Airport is the 26 th busiest airport in the world and the 3rd largest airport in the nation for domestic origin and destination. Orlando has a diverse economy Orlando is home to seven of the ten leading theme parks in the country. The University of Central Florida, with over 56,000 students, is now the second largest university in the United States Florida ranks among the top 5 states for favorable business tax climate according to the Tax Foundation s 2012 State Business Tax Climate Index. Florida has no state personal income tax and is a right-to-work state. The economy is recovering with consumer spending in November 2011 having increased annually by 6.7%. Orlando boasts a gross domestic product (GDP) of more than $100 billion dollars and a US$13 billion technology industry. Florida is the world s 19th largest economy with a growing export sector

8 Education Orlando is home to the University of Central Florida (UCF), now the 2nd largest university in the country with over $122 million in annual research; a #3 ranking on the IEEE Patent Scorecard and a top ten incubator network. The region is home to 35 post-secondary institutions based in the area. In addition to UCF, also located here are Full Sail University, Rollins College (ranked #1 regional university in the south and #1 MBA program in the state); and three of the state's best in the growing state/community college system Valencia College (named the nation's top community college), Lake-Sumter Community College, and Seminole State College; as well as Embry Riddle Aeronautical University, the Florida A&M University School of Law, Barry University School of Law, and the first stateside campus of Puerto Rican-based Ana G. Mendez University. Transport Orlando International Airport is ranked as the 13th busiest passenger airport in the nation and the 29th busiest in the world and is the 3rd largest airport for origin and destination. Ongoing expansion at the Orlando Sanford International Airport (OSIA), coupled with the state's largest foreign trade zone designation, has helped OSIA become the third most active international airport in Florida and the 12th most active in the United States. SunRail, the region s commuter rail system will be operational from Volusia County to Orange County by Eventually, the system will run 61 miles extending into Osceola County and will be complete by 2016.

9 The Economy The GDP of the Orlando Metro area is in excess of $100 billion. Orlando is one of the major tourist destinations in the USA and attracted over 55 million visitors in 2011, a figure that is forecast to rise in It is home to seven of the ten leading theme parks in the US. However, tourism only accounts for 21% of the employment in the region. Orlando's economy has greatly diversified from tourism and the area is now considered a major hi-tech centre. University of Central Florida is regarded as one of the best computer and engineering public universities in the United States, and is currently building a new medical school. The Central Florida Research Park is the seventh largest research park in the United States. Orlando is home to a branch of Lockheed Martin, and also hosts other major hi-tech companies such as Oracle Corporation, Electronic Arts and Siemens. Orlando is rapidly developing as a centre for biotechnology. It is home to Lake Nona Medical City, a life sciences cluster that could create 30,000 jobs with a $7.6 billion economic impact by year 10 of operation. Located near Orlando International Airport, the cluster includes the University of Central Florida College of Medicine, Sanford- Burnham Medical Research Institute, M. D. Anderson Orlando Cancer Research Institute, Nemours Children s Hospital, Orlando Veterans Affairs Medical Center, VA Simulation Learning, Education and Research Network (SimLEARN), the University of Florida Academic and Research Center and Valencia College.with the UCF College of Medicine, a VA Hospital, a Sanford-Burnham Institute research centre, and a Nemours Foundation children s hospital.

10 Economy cont Although the tourist industry is a major contributor to the Orlando economy, producing $31.1 billion, the jobs created only accounts for 24% of employment. Orlando has a strong local economy and is continuing to grow:- Metro Orlando has a rapidly growing $13.4 billion technology industry employing 53,000 people. It is nationally recognized as a centre of innovation in digital media, agritechnology, aviation and aerospace, and software. The University of Central Florida is now the 3rd largest university in the country with over $122 million in research; international reputations in innovations in lasers/optics AND hospitality; AND a new medical school breaking ground. Orlando has two airports Orlando International (OIA) and Sanford. OIA is the second busiest in Florida (after Miami International), the 13th busiest in the USA and ranked 26th in the world. Increased infrastructure: The local tax authorities in Orlando levy a 6.5% tax on all sales made from both residents and visitors which generates sufficient funds to ensure no state income tax is payable. From the billions of dollars generated the authorities re-invest substantially in roads, schools, hospitals and public transport.

11 The Economy cont The area is home to the U.S. operations of Germany s Siemens Energy, Japan s Mitsubishi Power Systems, Spain s Indra Systems, Australia s Adacel and many more. In total, more than 150 international companies, representing approximately 20 countries, have facilities in Metro Orlando. Many US companies have their headquarters in Orlando, including Darden Restaurants, Tupperware Corp., American Automobile Association (AAA) and Ruth s Chris Steak House, and there are divisional headquarters for many more. Metro Orlando has the 7th largest research park in the country (Central Florida Research Park) with over 1,025 acres. It is home to over 120 companies, employs more than 8,500 people, and is the hub of the nation s military simulation and training programs. Seminole County is a hub for information technology companies like FiServ, Harland, Temenos and Optria that are specialists in the software systems that drive the world s banks and other financial institutions. The Orange County Convention Center has been named the #1 convention centre in the United States by Business Review USA.

12 Orlando Property Market Trends General demographic and economic drivers have resulted in sustained growth in property prices in Orlando.

13 Sales price data from a variety of sources suggests that the bottom of the market was passed in Jan 2011, with sales prices for single family homes up 5.8% on 12 months ago. The number of properties available for sale has fallen consistently since The number of bank-owned foreclosed properties on the market has declined, and the corresponding increase in the number of traditional sales has boosted prices.

14 Future Prospects Orlando is "leading Florida out of the economic recession" and "one of the fastest growing cities in the country" according to Reuters. Kiplinger has named Orlando as one of eight U.S. metropolitans to outpace the nation's 7 percent job growth average between now and 2017 with a projected job growth of 15 percent over the next five years. Florida ranks #1 in the nation for talent pipeline and infrastructure, according to a report conducted by the U.S. Chamber of Commerce. In Chief Executive's survey of CEO opinion of Best and Worst States in which to do business, Florida comes in at No. 2. Entrepreneur magazine named Orlando as one of the "top ten places to start a business."

15 Construction Like all USA states, Florida is a heavily regulated environment. Construction is governed by the Florida Building Code 2010, which is based on national codes and replaced earlier 2007, 2004 and 2001 editions. The codes lay down detailed standards of materials and workmanship for the main elements of the building and for electrical, plumbing and other works. The emphasis of the code is on safety, structural stability, prevention of fire spread, resistance to wind, environmental impact, energy efficiency etc. Single Family Homes are typically of block construction with a tiled or shingle roof. Condominium buildings are normally of timber framing because of the availability of timber and the long established expertise in its use. The building codes cover anchorage of the frame to the foundations or ground floor slab, preservative treatment of timbers, connection of timbers, wind bracing, etc. The timber framework is clad externally with a vapour barrier and a sheathing of ply to make it rigid. The exterior finish is usually of cement or other siding boarding, brick, or cement stucco (render). The interior of the framing is dry lined in plasterboard. Roofs are mostly pitched roofs of timber framing clad in ply sheathing, usually cement tiles or asphalt shingles, which are tile sized pieces of asphalt felt, secured to the sheathing in an overlapping patter. The building codes cover the quality of materials and method of fixing, etc

16 Ownership of property There are no restrictions on foreign ownership of Real Estate in the USA, although there are restrictions on residency. Title to Real Estate allows exclusive possession, in perpetuity, with unrestricted rights of transfer. The Title will usually be for one of the following types of Real Estate:- A single family home - you own the land plot and the structures on it. A Condominium you have full ownership rights to an individual unit (typically an apartment, but townhouses can also be condominiums) in a multi-unit development, and own a share of a Homeowners Association which owns and controls all of the common parts and services. Property transactions in the USA are typically carried out without much input from lawyers. A seller will list the property with a licensed Real Estate agent acting as a broker- all agents in Florida have to be licensed and they are strictly regulated. After a purchase has been agreed, the agents will produce a standard form of contract in Florida it is approved by both the Florida Association of Realtors and the Florida Bar, simply referred to as the FAR/BAR contract. It can be amended by agreement by the parties. It will set the parties, the price, the date for closing etc. The actual conveyancing is carried out by an independent third party Title Company who carry out the searches, check the Title, produce closing accounts for the parties, hold the buyers funds in escrow and transfer it to the seller. Finally they register the buyer as the new owner at the county court. The services of the Title Company should be backed by Title Insurance, which the purchaser generally pays for

17 Taxation Real Estate Tax this is based upon the assessed value of the property by the local County and is reassessed every year. Currently, these taxes are reducing after many years of escalation. The tax value of a condominium is based on a combination of the apartment value and a proportion of the communal facilities value. The rate is currently 1.5%. Federal Income Tax (Rental) a tax return showing income vs expenses needs to be submitted each year and this can be organised by St. David..Investors buying it in their own name may claim a personal allowance of US$3,800. By electing to have the rental income treated as effectively connected to a business they will then be taxed at the rate of10% on the first $8,700 of net income. Individuals may also claim all mortgage interest, management costs, and other expenses which can be offset against the rental income, together with the cost of visiting the property up to three times per year. Capital Gains Tax (CGT) the standard tax rate if the property is sold after the first twelve months of ownership is 15%. (If sold within the first 12 months the rate is 35%) Purchase and sales costs, and management costs, can be offset against capital gain. There is a scheme whereby if the proceeds of sale are re-invested in another property in the US within 45 days, no capital gains tax is payable.