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Closing costs
You should budget approximately 3% of the purchase price to cover legal, title and agency fees.
Tax on Rental Income
In most instances this can be mitigated to zero as the property and any furnishings can be depreciated. Things like maintenance can be deducted and also visits to Florida by the owner.
Real estate tax
Once the purchase is concluded the owner can request a re-appraisal of their real estate tax as the current appraised value will be out of date and probably higher than it should be. This should result in a lower tax being payable than illustrated.
Visa & Finance Issues
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HOA (Home owners association fees, same as building management fees)
Will depend on the facilities offered in the community. Some residential communities will not offer all the bells and whistles and HOA fees can commonly be as low as $150 per month.
Capital Gains tax.
US law requires that 10% of the gross sales price be retained by the closing agent and submitted to the IRS to cover any potential capital gains tax owed as a result of the sale. However, with US accounting laws as they are it is likely that you write off most gains in the medium term and your exposure will be minimal. An application for exemption can be prepared and filed to the IRS allowing cleared funds to be released to you before the tax filing time (usually within 90 days of submission).
Please note that the above figures relate to the state of Florida only.
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