Foreign Investors: Florida Real Estate Has Plenty of Potential

by Florida's #1 Mortgage Planner on April 12, 2008

As I have mentioned several times before, foreigners looking to buy property in Florida are in a prime position to pick up that home, condo, even commercial property  for what is, in essence, pennies on the dollar.  The devaluation of the dollar, combined with price depreciation of properties in Florida, especially South Florida, leave plenty of bargains to chose from.

Financing for foreigners is a little more difficult than for US residents, but those limitations should not dissuade foreigners from buying up property.  Trying to time the markets is also not worth the risk since prices ay fall, the dollar could also rebound.  There certainly are more factors to consider for foreigners as exchange rates play a big role in determining bargains.

Here is one way that a someone from England, Ireland, France, Spain, or other country can prove profitable when purchasing a property in Florida, even if it prices decline…

Let’s say someone using euros decides to buy a home in Florida that costs $500,000.  Since the euro is trading for roughly $1.50, give or take a bit, it will cost that person 333,333 euros. 

Now, five years down the road, that home actually loses value in the US and the investor gets only $400,000 on the sale.  During the same time period, the dollar rebounds well, and the euro returns to $1.25.  While a US citizen would lose $100,000 (20%), the foreigner would get 320,000 euros, a net loss of 13,333 (4%).

Let’s say that the exchange rate improves dramatically and it drops to 1 for 1.  Now, the same property still loses $100,000 (20%) for a US citizen, but the foreign owner actually makes 66,667 euros (20%)!!!

As you can see, their is potential for profit for foreigners even if properties drop in value further.  So why wait any longer to purchase that home in Florida?

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