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1 in 4 renters spend half their pay on housing

Posted by Editor on May 4, 2015
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ORLANDO, Fla. – May 4, 2015 – Canadians Edward and Arlene Fairbrother are selling their $395,000 Central Florida vacation home for a $30,000 loss but, because of favorable exchange rates, they expect to at least break even.
For every U.S. dollar they collect on the sale, the Saskatchewan couple can exchange it for about $1.20 in their native currency.
“I would consider the exchange rate as the primary factor in whether to buy or sell in the U.S.,” Ed Fairbrother said last week.
Advantageous exchange rates and fast-rising prices are driving Canadians, Central Florida’s prime international buyers, to unload properties they picked up during the depressed housing market.
Simon Plumb, who heads U.S. operations for the Currencies Direct exchange, said he has seen a “big shift” in Canadian vacation-home owners starting to sell.
“The Canadians didn’t suffer anywhere near as much … and they were able to pick up Florida property very cheap,” said Plumb, who is based in Orlando. “What we’re seeing now is that the same people who were buying three or four years ago are selling now. It’s a very good time to be a seller of U.S. property, if you’re in Canada.”
In addition to currency rates working to their advantage, they can now benefit from the price increases of recent years. The median price of a single-family house in Orange, Osceola, Seminole and Lake counties increased 40 percent to $180,000 during a four-year period that ended in 2014, according to Florida Realtors.
Winter Park real estate agent David Welch represents a Canadian investor who picked up 14 rental houses during the downturn and is poised to sell. She sold one property last year and doubled her investment, he said.
Orlando real estate broker James Donovan, who specializes in vacation-home sales and represents the Fairbrothers, said he has seen a marked increase recently in Canadians wanting to sell their second homes in Central Florida.
“I just listed three this week. A lot of them had no intention of selling, but now they’re coming in and saying, ‘We bought it as an investment and then used it for a few years,'” Donovan said. “They can take a hit on the sales price and reduce the price more and still make money.”
The budding trend affects more than a few properties. Last year, a quarter of Orlando’s international buyers hailed from the United States’ neighbor to the north, according to research by Florida Realtors. About 10 percent of sales in Florida, or $7.97 billion last year, originated with international buyers.
Beyond the potential profits from sales, Canadians may also be motivated to unload their properties because carrying costs can be more than they expected. Property management fees, maintenance costs and utility bills can easily run $10,000 annually for a vacation house, Donovan said. And after spring break, finding tenants to rent the houses can be more difficult.
“I don’t know any owner who hands a property over to a management company and doesn’t end up subsidizing it,” he said.
In Davenport, Fairbrother and his wife purchased their pool home at Highlands Reserve in March 2008, not long after prices had begun a five-year downward spiral. They live about a five-hour drive north of the U.S. border, but wanted a place near the theme parks where their children and grandchildren could visit during the six-month stretches the couple stayed there. At the time they bought it, the U.S. and Canadian dollars were about on par.
A number of factors motivated them to list their Davenport property about two months ago. They quickly landed a contract and, even though the offer was about $30,000 less than they paid for the house, they may profit from the sale because the U.S. sales proceeds will go about 20 percent further in Canada than they would in the U.S.
Even though Canadians may have new motivations to sell Florida investment property, cold winters always seem to drive a steady stream of domestic and foreign buyers to Central Florida, said Donovan. The sale isn’t complete for the Canadian couple. Fairbrother said the closing was temporarily delayed because the buyers are from Boston. Real estate appraisers there have had a backlog of work.
Longstanding snowdrifts have kept them from seeing houses.
Copyright © 2015 The Orlando Sentinel (Orlando, Fla.), Mary Shanklin. Distributed by Tribune Content Agency, LLC.

2 thoughts on “1 in 4 renters spend half their pay on housing

  • on June 3, 2018

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    • Editor
      on June 9, 2018

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