Recession forcing Snowbirds to leave retirement states

WAs this written by a Texas land developer or something, sure the jobs are scarce but the sun and low real estate costs plus low cost of living are still here

My husband and I recently returned from Hawaii. We know of a condo complex frequented by snowbirds from Canada. We are thinking of purchasing a unit to use for a couple of months but then rent it out for the remaining months. Has anyone advice, has anyone done similar?

As a Canadian I would not buy in Florida at all. If you decided to please make sure you take a look at taxes, not only property but the taxes they withhold upon sale and or transfer of property. I would also suggest that you find out what your property taxes would be as it is very different if you are not a HOMESTEADER. If I recal homesteader taxes can only be increased to a maximum of 2% per year. If you are not a Homesteader then there is no limint on how much they raise your property tax.

I have been going there for years and first off renting is the only way to go. I do not have to worry about anything after I head home, ie water heater, break ins etc. To rent to a loca, well you are just looking for trouble. The place I have been in was rented to a local from May to November and the owner had to repair major damages. Not worth the headaches. You can get a very nice place for $1500.00 a month everything included other than long distance calls.. If you are there for four months that is only $6000.00 for a winter holiday. Some pay more than that for a 2 week holiday. I guess in my case I have found renting to be better, no headaches and even after renting for ten years and paying about $50,000.00 I am better off than having to have paid first off for the property and then taxes for all those years. Remember also that obtaining property insurance in Florida can also be tough due to hurricanes.

Hope this helps Pauline...just a thought.

I have friends who owned in Florida. Snowbird58 has it right. If you go for part of the year, renting it the way to go, even renting a spot in a RV park beats owning. Florida is notorious for its taxes on non-homesteaders. And with the population of Florida decreasing, the property taxes can only go up even more to keep up with the flagrant spending spree of the state government. As for destructive tenents, they are here in Canada too, don't ask how I know.

I have friends in Canada who planned retirement very carefully, but upon getting there realized that places such as Las Vegas & Florida were too expensive to realize the retirement dream. They headed to Texas - and they love it!
They bought large trailer homes right near the Mexican border and can literally walk across to stretch their money further. That's a terrific bonus after losing what Canadians lose on the American exchange which is still mind boggling since the country is bankrupt... but oh well... we don't have the warm climate here... So it has nothing to do with this latest recession I don't think as much as it has that the typical Nevada/Florida retirement places have been price gouging too long and people are fed up and looking at alternatives... and rightly so.

Question?
I understand the different tax conditions as for homesteaders/non-homesteaders in Arizona/Navada/Texas is as in Florida. Is this true?

Barry

My wife & I considered buying in Florida. The actual purchase price was not the problem. It was the carring charges, ie: taxes, insurance & H.O.A. As one of the attached comments indicated state gov't. will be looking for revenue & no doubt non-homesteaders will be targeted.

Renting is the way to go for us.

ifyou live in western part of canada go to yuma Arizona ,, we spent nine winters there in an R.V. park and enjoyed every minute living was cheap there also , Mexico is nearby and not far off is San Diego when you get there tell them we say hello we miss you all residents and holiday makers ,earl and peggy

My husband and I are Canadians. We did have a condo in Florida for 13 years and now we are happily retired in Lake Chapala, Mexico, 30 minutes south of Guadalajara, along with approximately
15,000 other Canadians.
The weather is incredible (approx 20 C all year round). We live in a 3,000 sq. ft. home on the
golf course, our house taxes are under $100. per year, no heating costs and no air conditioning costs. Yes we have Walmart, Sams, Cosco and all the chain stores you could want.
It is sunny everyday and the Mexican people are wonderful.

I think Bonnie hit it on the head, Price gouging in Florida is rediculous.
I spent several winters in Florida, this winter we are in Arizona,
Acc here is reasonable, Sunshine twice that of Florida
Food prices at least 50% cheaper than florida.
People smarten up after seing everything increase year after year in florida.
G

What is all the scare tactics about taxes in Florida. Clearly someone is fear-mongering and they do not know the tax laws, of which are county property...not state.

Even without the Homestead exemption and the associated market value cap, my taxes are half what they are in Toronto.

Perhaps instead of the panic...people should investigate the reality...

Jean Melnyk
Thanks so much for your view on choice.
Please email directly to me jeeb@digitalweb.net as we are Can. Snowbirds with no nest yet & I need a rest.
Thanks, Judy

To Bonnie about Texas
Yes i listened to a local Canadian who travelled the US & found that they are very happy in Texas. Could you email me directly as we are leaving soon to find a resting nest and i don't have time to keep moving around to find the right one. What you say sounds like a good choice.
Thanks jeeb@digitalweb.net

My wife and I are in our 30s. We thought that the current situation in the U.S. to be a huge opportunity. We avoided Florida due to to the property tax (we didn't know about the homestead exemption at the time). We purchased condo properties in Phoenix, AZ. We're relatively are young, so we're renting the condo's out. Since we are landlords, our visits to Phoenix, AZ are tax deductable. For better or worse, I know Phoenix, AZ far better than I thought I would at this age, but you can't really time real estate opportunity so it is what it is.

Just a general tip. Currently 2 bed 2 bath condos in bad areas of Phoenix, AZ are priced around 20K to 30K. If you see a 800-1000 sq ft condo priced in that range, you can be sure it is in a rough area. If you want a good (low violent crime, low property crime) area, then you can find 2 bed 2 bath condos at approximately 40K to 60K each. If you want a 2 bed 2 bath Scottsdale condo short sale or foreclosure, then double that price again (ie 80K to 120K).

I know these prices are difficult to believe, and I wouldn't have believed them myself if I wasn't already an owner.

We own a few 2 bed 2 bath condos and to give you an idea of how bad it is down there - one of our condos was previously owned by an out-of-state owner who purchased the unit as an 'investment' (2 years ago) for $140K. He put a tenant in there to try and defray his costs ($750 p mo. rent), but circumstances went from bad to worse as he lost his job. He put the condo up for sale at $50K (which included the paying tenant). We bid $36K. He countered at $43K. Then fortune went our way as Bank of America (BoA) put up a short sale next door at $30K (this was pure luck). I told the Seller that I wouldn't pay $36K without going for the BoA property first. He quickly told me that he would take the $36K.

I agreed (if you understood short sales you would know why). During our due diligence, I told the Seller that, with a tenant currently in the unit, I wouldn't know what I would need to do after she left (paint, clean carpets, etc.). I asked him to either give me a cheque for $1,000 for deferred maintenance or lower the price to $35K (I had done some investigations as to what I would likely need done after having a home inspector look at the unit, so the $1,000 demand was an 'educated guess'). He quickly lowered the price to $35K and we closed.

To further break down the numbers on this particular 2 bed 2 bath condo:

$35K purchase price

$750 per month paid by tenant for rent (verified by bank statements; lease until Nov 2010)

$175 HOA per month
$80 property taxes per month
$40 per month home insurance (external)
$30 per month home warranty (internal)
$75 per month property management

Cash flow = $750 - $400 = $350 per month = $4200 per year (per unit)

In addition, the landlord and tenant act in AZ is far more favourable to landlords than it is here in Ontario. The courts do not tolerate deliquent tenants and once the eviction process is started, the tenant is thrown out within a month. That kind of response time is virtually unheard of here in Ontario.

For the example above, the rent is due on the 1st of every month. If no rent, the property management co. gives 4 days and sends a notice on the 5th. If nothing happens by the 10th, eviction starts on the 11th. Court date a week or two later and the tenant is kicked out by the 30th or 31st.

Just to be clear, these deals are not easy to find (but they do exist). After countless hours of study I learned the lay of the land, evaluated hundreds of properties (500-1000 wouldn't be unreasonable), and visited the city with my wife in order to place bids on a dozen properties just to secure the few that we currently own. Keep in mind that before this endeavor I knew absolutely nothing about Phoenix, AZ (I had never been there); so I needed to do a lot of homework.

too looked at Florida just this past month (Naples) as a opportunity to buy a winter residence and here is what I discovered.

I was offered a property in a gated golf course community for 130K. Three years ago, people were lined up to drop over 300K for the same property (same neighbourhood and similar). It was a really nice 3 bedroom stand alone villa backing onto a green belt. Lanai but no pool.

So I did the math. Between taxes, insurance, HOA fees, debt retirement fees for the developer???, ground maintance fees and golf course social membership fees (mandatory if you want to play golf). Green fees were extra. The total cost was close to 15K per year with unlimited upside and no downside. This does not include the opportunity cost of the 130K in capital to pay for the unit.

I would also suggest that there would be some type of closing costs over and above lawyer fees.

I also propose that Florida real estate is going to be depressed for a very long time. I also believe that Florida real estate still has a way to go down before it goes up. Too much inventory, unfriendly taxes for non residents. I also get the sense that some of the gated communities and developers are practically giving properties away to cover the variable cost, see above. Just like those cheap cell phone plans that lock you in for three years.

While, I was down there I secured a property to rent for the month of February for $4000. It is 2 blocks from a public beach, has a pool, high speed internet and a big screen TV. What more could one need. I bet that I could get this property for three months for 10K

I could go on about health insurance cots but lets assume we are all healthy and don't need to pay extra because you have a heart condition or something similar. ie if you rent, and your insurance gets to be too expensive, you don't go.

Why Florida? If you are from Ontario, you can drive in two days. Arizona and Texas is just too far.

The reasons why Snowbirds do not go to the USA for the winter are

Canadian have to pay the exchange rate first than the rent in Florida for snowbirds is to HIGH eg A mobile home with 2 bedroom build in early 60 cost a minimumm of $1400 to $2500 a month plus telephone and TV and 80 % of the home are not properly clean prior of moving inand the accesories let to be desired.
One must also take into consideration that prior of leaving Canada one also have to pay for the rental Unit, heating , cancellation and re-installation of telephone TV ect in Cabnada prior of departure. however the most cost is having to pay exorbitant mediacal insurance prior of leaving Canada eg for 2 adult to be cover for $50.000.00 for emergency only cost over $2500 US Dollards the insurance companies in Canada are over charging like for full coverage for NEW SICKNESS and not covering the Present Sickness cost for 2 adult a minimum of $4000 to $ 10000. each We were lucky last year to find a US insurance company that we paid for an insurance for emergency purposes Over $2500 US dollards for the two of us.
Now The total cost before leaving Canada are the forrlowing
Insurance at the minimum $ 2500.00
Renting $1400 + for 5 months $ 7500.00
Telephone & TV $150 . Per month $ 750.00
Travel form and Return to Canada on traveling from east Ontario to Orlando minimum 4 days each way cost approx" $120 a day Gas, food, hote,l additional expenses suc has tips cost $500. minimum
So that is arriving and returning to Canada one as put out a total off $ 11500 dollars Plus Exchange on the dollars make it about $12,000 spend even before buying food , excidentals , like pot and pan as most place, the ordinary items require within the household are about 5 to 10 years old and have served the renter all these years. How can Snowbirds have the cash every year to affords the expenses and still did not include the cost of having the snow removing in Canada, pay someone to
take care of you property, pay for dammage during Black out , paid for of your Internet services ,even if you are not using it for 5 months. electricity to have you house heated at a very low temperature to prevent freezing specialy if it is a Mobile Home.heating fuild . To cut it short a total expenses for my wife and myself for 180 days in the sun last years cost us ovet $15500,
One cannot on a very small pension afford these trip every year , Before someone star relizing that Canadian are been taken in the USA in many way specialy RENTING one can rent for a full years in the Area or Orlando and it Surounding for no more the $650.00 a months so why pay for the same house $1500 because we are Canadian. FORGET IT for now on, anyone are better off to go to other sunny country and be serve like kings at a better prices .
Think of it and change you snowbird adventure for next year and enjoyed like your trip like we will do starting in February 2010. and spending 1/2 of what it cost me last year . No more Florida for us.

To: Jean Melnyk: I am interested in buying in Mexico and I was wondering if you could tell me the approximate pricing of houses there. I don't quite need a home over 3,000sq.ft. something smaller. What would the payments be and do you have to set up a bank account there in order to purchase? Or can you possibly help me find all the info I might need to relocate there?

Thank you very much
Darlene Thiele
.,.

We bought a house in Florida 2 years ago and I must say the costs involved were no different than Canada. Our taxes are actually less than our home in Canada..it is just that homesteaders pay significantly less.

commenters are forgetting demographics....millions of americans are retiring in the next few years
I have no problem renting my waterfront condo for $8000 for jan,feb,mar
florida is an easy drive from the most populated areas of the USA and airfares are cheap.
Yes it was and is expensive to own and maintain property,however, in demand areas have not
seen the decrease in property values that some overbuilt areas have.
Check out SW florida and in particular in the Cape Coral area......for around 200/250K you can
buy a modern property on water access to the Gulf
Remember there are many arts and cultural events in florida in the season,its a question of how
involved you want to get..and when you go to the beach you are not pesterd by vendors every
two minutes !!
I am not a real estate agent but to echo their mantra Now is the time to buy!!

To chris, I am a canadian and usually stay in a gated community in punta gorda which is close to cape coral. We had looked at purchasing but decided against it due to the monthly expenses for a non resident and not being there year round. If you can get that much money a month for your property that is great however the mortgage costs, insurance, hydro,upkeep etc are high and as a retiree you have to have a great cash flow and a great pension to afford the costs of maintaining two properties. Renting is still the way to go as if a hurricane comes through or you do not like the area you are in you can move. We are in a very nice gated complex 2 beds 2 baths, all the needs are there.We are paying 2000.00 a month all in and are on a golf course next to charlotte harbour with great fishing. The complex has great views, a restaurant on grounds, tennis, golf, and a work out centre. This beats writing cheques monthly for 3000 to 4000 us funds.I sincerely hope it works out for you as realestate in florida is still very slow and according to a number of agents we know it will be for a long time. If re-sale is something you are thinking about it may be a while to recoup your profit.