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* Income Tax Advantages
* We are paid by the seller!
* Renters can pay most of, or all of your monthly mortgage payments
* Completely furnished turnkey rental vacation homes
* Minutes from Walt Disney World Resort, Sea World and Universal Studios Florida.



Your choice of a mortgage provider and a specific program should be primarily dependant upon your future plans for the home, current mortgage rates, and your own individual requirements. Comparatively, consider the promotional incentive that may be offered by your chosen developer to use their mortgage company. Because mortgage products are constantly evolving and adapting to specific market trends, you will certainly want to contact an independent mortgage broker that has experience with financing short-term rental properties. Although you may not use his or her services in lieu of a more attractive developer offer, the value of their expert advice and competitive comparisons will help guide you to a confident choice.

If a house is a house…why shouldn't I use my mortgage broker? Ask your mortgage broker if he or she has ever financed a home near Disney World that was totally furnished, and included not only furniture, but televisions, pots and pans, towels, linens, small appliances, artwork, etc. He/she most likely will tell you that personal property cannot be financed in the mortgage. But, it is done everyday in this specific housing niche. Because many income producing vacation homes are a total turnkey furnished package, mortgage brokers who specialize in these properties know which appraisers to call to get the necessary appraisal. Also, they have pre-established relationships with specialty money sources for the financing. Ask your Realtor which lending institution they recommend and call them. Do not allow your own mortgage broker to learn at your expense.

How much of a deposit should you make? Most mortgage lenders require non-US residents to deposit 20% to 30% minimum. As I mentioned in the "Things to Consider" chapter, your goal should be to deposit enough money on the home so that the mortgage payments and other expenses will be covered by the rental income. Your chosen management company should be able to recommend an amount that will achieve that purpose. Do not put too much down. The more you deposit on a house, the lower your return on money invested. True investors would choose to deposit 20% on five houses, rather than paying cash for one. Why? Let's say that the investors are considering homes that sell for $200,000 each. They would be investing the same total amount of capital whether they purchased one with cash, or financed five with a 20% deposit. If they bought five, the investors would realize appreciation on $1,000,000 of real estate. If they bought one home, their investment return would be based on the appreciation of property valued at $200,000.

You will find that there are many finance options. Many vacation homebuyers prefer a fixed rate loan that locks in a set monthly principle and interest payment for typically 25 or 30 years. The payment is lower with the longer term and thus easier to cover with the rental income. Some homebuyers who plan on selling their property in a few years select a fixed payment term of five or seven years that converts to an adjustable rate at the end of the fixed period. A good mortgage broker or lender will take the time to explain the options and prove to be a most valuable consultant.

©2007 Vacation Capital Real Estate, Inc.


Copyright © 2007 Vacation Capital Real Estate, Inc. All rights reserved.
Revised: August 3, 2007
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