FLORIDA REAL ESTATE FOR GERMANS | SWISS

Germans, Swiss and Austrians have long enjoyed Florida real estate the trend continues without exception. There are several differences in the buying process when purchasing Florida real estate as opposed to buying in most European countries.

As an international real estate group located in Naples Florida, we are accustomed to working with German, Swiss and Austrian nationals regarding Southwest Florida real estate. As you read this page, you will find useful information on many answers to questions that have been posed by our past clients.




Before you plan on purchasing any Naples real estate, we advise you to plan your affairs as regards estate and tax issues accordingly. We can connect you to many international tax specialists who can help you devise a plan for your specific circumstances. It is important to understand the potential U.S. tax implications before you purchase an underlying property. Know the mistakes foreign buyers of U.S. real estate make beforehand so that you are prepared.

COMMISSION TO BROKER (Maklerkommission)

The first thing you must know is that in the U.S. the buyer does NOT generally pay a real estate commission to the broker for helping you find a suitable property. In Germany, buyers pay this commission, but that is not customary in the U.S. Here, it is usually the seller who pays the broker commission.

REAL ESTATE PROPERTY TYPES (Arten von Immobilieneigentum)

We find that most European buyers like single-family homes as well as new homes with swimming pool near the beach. However, we are finding that condos are also being purchased by Germans, Swiss and Austrian buyers because there are more beachfront condos available. Condos provide the added benefit that the condo fees cover the maintenance of the building, and therefore offer low or no maintenance living. You will find homes and condos in every price range. Luxury buyers generally find beachfront properties or properties with Florida Gulf views as well as luxury golf homes from $1 million but there are many properties in the $300s east of US 41 (approximately 20 minutes from the beaches). Even in between you will find many properties depending on location, style and age.

FINANCING YOUR REAL ESTATE (Finanzierung von U.S. Immobilien)

Cash is still the best way to buy any property in Florida. You can certainly finance any real estate purchase in the U.S. but be prepared to pay a higher interest rate as a foreign buyer. This is especially true if you are German or Swiss, where you enjoy lower interest rates on financing a property. In addition, you will not benefit from mortgages that are cast over 15 or 30 years, but instead they are capped at 5 years. Closing costs associated with the financing of the real estate are also approximately 2 to 3 percent of the mortgage amount. Be prepared for a down payment of 30 percent. Of course currency fluctuations also come into play. If you are planning on transfering money from a foreign country for your real estate purchase, contact us directly, as our real estate office can refer you to our partner at Moneycorp with whom we have negotiated rates that are much more favorable than those you will receive at banking institutions.

WHERE TO BUY (Wo Man Am Besten Kauft)

Clients have different requirements and budgets, therefore buyers are spread from luxury properties in South Naples to investment properties in the North as well as Naples Park. North Naples also offers beachfront homes and condos in Barefoot Beach. The downtown area offers you Fifth Avenue where you will find coffee shops, restaurants, parks, art galleries, the fishing pier and luxury properties in Old Naples, Olde Naples Seaport, Naples Bay ResortAqualane Shores and Port Royal. This area is within walking distance to many amenities and homeowners also are seen on scooters. The center and northern portion of the city features the Park Shore and Moorings areas, as well as Strada At Mercato with upscale shops, many area businesses, restaurants and Artis, formerly known as the Naples Philharmonic. Vanderbilt Beach and Connors Naples is also in this area.

OLDER VS. NEWER PROPERTIES (Altbau Oder Neubau)

This also depends on location, as the most desired communities and neighborhoods are found West of US 41. These properties tend to be older but are located closer to the beaches, amenities and businesses. Older homes therefore tend to be found in prime locations and can often have larger lot sizes. However, many of the older homes have been renovated in order to reflect today's modern designs as well as updated construction methods for the new hurricane codes. You will find these beautiful homes in the Moorings, Aqualane Shores, Coquina Sands, Olde Naples, Park Shore and Port Royal neighborhoods. Older homes tend to have an architectural style with lower ceilings vs the higher ones you will find in the newer communities. The closer you are to the beaches, the higher the insurance costs for the home and the higher the price of the land. The more updated the home is to current hurricane codes, the lower the insurance premiums. Sometimes there are outstanding opportunities to purchase an older home, renovate and force appreciation in a short period of time. We work with many buyers who have chosen to do this due to the location of the real estate.

HOME INSPECTIONS (Haus Inspektionen)

We always advise our buyer clients to have a home inspection completed on the purchase of a home or condo. This is will give you the peace of mind in knowing that any problems are identified early on and can be remedied before you purchase the property. Most often these issues are taken care of by the seller of the property. In some instances, you are able to buy the property in an "as is" condition. You can also include additional radon, gas, mold and termite inspections if you wish. 

GATED VS. NON-GATED COMMUNITIES (Anlagen Oder Freies Wohngebiet)
This is a matter of choice for most buyers. Many prefer the open and non-gated communities that do not impose strict rental rules or community restrictions, while other clients want all the luxury amenities and conveniences associated with resort communities or are avid golfers, and desire top-notch golf communities. Gated communities can offer you the conveniences of a golf course, tennis, clubhouse, restaurants and bar, fitness center, play area for children, community events and more. They are exceptionally well maintained and have security guards with gates for privacy and protection. You pay for the maintenance of this upkeep through a master homeowner association on a quarterly basis.

CLOSING OF PURCHASE (Eigentumsübergang)
It is not required for you to be present when closing on a home or condo. The closing can take place while you are outside the U.S. and we simply email and fax you the required papers for signature. If you buy a property in cash, you do not need to have it notarized as is customary in European countries. Furthermore, we have clients who sometimes purchase a property without ever being present. We send them a video tour of the property(ies) they are interested in and a closing takes place within weeks. Sometimes when a good deal is on the market or the buyer wishes to buy in a given time frame, he or she contacts us and we handle everything from the beginning through the closing.


TRANSFER OF REAL ESTATE (Hausübernahme)
For clients of ours we assist and take care of the transfer of utilities including water, garbage removal electricity and telephone service. For cable TV, it is required that you be present. We also assist you in receiving quotes for your home insurance or assist you in opening a bank account in the area. If you require renovation in your new home or condo, we have a list of excellent contractors at our disposal and can manage the process for you.

CLOSING COSTS (Kaufnebenkosten)
Closing costs are not nearly as high when purchasing a home or condo in Florida as compared to many European countries. You can generally count on less than 1 percent for closing costs associated with any purchase that is transacted in cash. If you are financing a purchase, then these costs are slightly higher. In addition, costs can also slightly increase if you are purchasing a home in a community that requires a transfer fee or CDD (Community Development District).

PROPERTY MANAGEMENT (Hausverwaltung)
If you wish to purchase a home or condo in Southwest Florida, you have options when it comes to the management of your property. Most property owners hire a competent property manager to handle the real estate while away. Issues can always surface and you will need someone to overlook your air condition unit, plumbing, mail, pool service, gardening, pest control, turning over of the property to a seasonal renter, house cleaning and management of rental income if an investment property. Property management fees vary based on location, size of home and whether the property remains vacant or is rented out seasonally. Fees are often 10 - 15% percent per month of rental income and around US$130 per month for the management of a vacant property (bi-montly service of entering your home, flushing toilets, checking plumbing etc.)

COSTS OF OWNING REAL ESTATE (Immobilienkosten pro Jahr)
The cost of owning a property in Florida varies depending on purchase price, location, age, taxes, property management, maintenance, association fees and insurance costs. The newer the home, the less costs are going to be associated with repairs and maintenance. Whether you are in a gated or non-gated community will also affect your costs, as will financing versus cash. The higher the purchase price, the higher the taxes. Taxes on U.S. property are paid yearly. This is obviously not the case in Europe. Of course many of these costs are generally offset as an expense on your U.S. tax returns.

RENTAL INCOME (Mietseinnahmen)
Many foreign buyers of Florida real estate choose to rent out their properties in order to offset the carrying costs associated with owning a property. You can rent out your property all year, or seasonally for the majority of the year. These types of homes are best purchased in non-gated communities, or those that have a swimming pool and are close to the beach. Our clients often use the property for two months per annum and rent out the home for most of the remainder of the year. It is not difficult or time consuming for you to rent out your property. The property manager can advertise, do leasing agreements, take in rental income, deposits, exchange keys, turn over the property to new tenants and take care of the cleaning. Your involvement is extremely minimal. On your behalf, we can also take care of paying the Collier County tourist tax on rentals that are less than 6 months in length.

Rental income on a U.S. home or condo is considered U.S. source of income and is taxable in the U.S. Just because expenses can sometimes exceed any income this does not mean that a U.S. tax return should not be filed. On the contrary, if you do not file the tax return and make a special tax election, you will not be able to use the offsetting expenses in order to reduce your income. Instead, you will be subject to a 30 percent tax on Gross Income of the property without offsetting any expenses. Therefore, it is to your benefit to simply file a U.S. tax return, make the tax election and take all applicable deductions allowed. You also will have the benefit of carrying forward any losses not used in order to offset future income or gains on your property. It is simple and inexpensive to file such as U.S. tax return. We can help guide you to stay tax compliant with a network of our partners that we can refer you to.

HURRICANES (Hurrikane)
Naples has not really experienced the killer storms many other areas have had in the past.. The media tends to overhype these storms and the last time we had such a severe storm was in 2005. Before this you would need to look back to 1992 and 1966. The majority of the damage is often found in pool cages and roofs of older buildings that are not built to hurricane codes. Since 2002, we have new laws in place for new construction homes that significantly reduces the damage caused by such a storm. In addition, you are insured for such catastrophes through your homeowner's insurance policy, where you can expect approximately a 2 percent deduction (Eigenbeteiligung) of the insured amount.

WINTER MONTHS (Winter Monate)
In Florida you will most likely not make much use of your air conditioning unit over the winter months. Sometimes you will use your heater, which is the same as your air conditioner. Heating in Florida is electric as opposed through gas or oil as is customary in Europe.

SWIMMING POOL ENCLOSURES (Pool Umz
eunung)
You will find many homes with a pool cage protecting the swimming pool area. This is done in order to reduce any mosquito infestation as well as debris from outside trees. In addition, it keeps our wild animal friends from getting inside your property. Pool cages also offer you a good amount of sun protection. Mosquitoes are not as bad as most people tend to believe. The county is in charge of continually spraying infested areas, unless you live near still lakes and the Everglades during the summer months. When on golf courses it is recommended that you apply a bug repellant, but otherwise you will not find them to be much of a nuissance. In the winter months they are almost non-existent.

CRIME RATES (Kriminalität)
Crime rates are significantly lower in Collier County than in many south European countries or larger cities throughout Germany. The crime rate has been steadily declining for the past 15 years in a row. Since 1996, the annual decline in Collier County has ranged from 1 percent in 2008 to 17 percent in 2000. In those years, the overall rate has fallen from about 6,100 per 100,000 residents to 2,040 per 100,000 residents.

If you wish to acquire property in Southwest Florida, we will be happy to assist you and advise you on all real estate matters pertaining to our local market, as well as refer you to professionals that deal with tax and estate issues. 

Please contact the Parker Carson International group directly for any further assistance and advice on your Southwest Florida real estate needs. Our real estate team has helped many clients from European countries, including Germany and Switzerland realize their goal of living in Florida. We can assist you in German, French and Spanish.


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