Why you get targeted specifically
Neither pitch is aimed at Americans. Both are built for you, and it helps to first understand why.
The cheap house works on price contrast. If you live in the South East of England where a two-bedroom flat costs £350,000, a $90,000 three-bedroom house that rents for $1,200/mo sounds like nirvana. Your instinct is that it cannot be that cheap, and the salesman's job is to explain the price away as an American quirk rather than a signal about the property or the street.
Florida works on familiarity. Millions of Brits have holidayed there. You know the roads, the malls, the theme parks. It feels knowable in a way that markets like Cleveland, Detroit, and Indianapolis don't. And a British buyer who has stayed in a Kissimmee villa can picture owning one immediately.
Neither of those is a reason to invest. Price contrast isn't always a good thing. When things are cheap, more often than not they're cheap for a good reason. Usually, that's because they're defective, or just undesirable.
Familiarity on the other hand tells you about your holidays. That's tying your investment decision making to a highly emotional state of mind. It's clever, but it's disingenuous.
But both are powerful, and a good salesperson knows it.
Pitch one: the cheap house with a promised renovation
The model works like this. A company buys distressed property cheaply, often at auction or off-market. It sells that property to an overseas investor for a much higher price. Then, with your money in hand, it carries out the renovation.
There are lots of problems with this model, not least the order and sequence of events. You pay first. The work happens after. And you are 4,000 miles away.
I've seen the end result of this more times than I care to mention. What frequently arrives is a cosmetic job. New flooring, fresh paint, a kitchen refresh, all with lovely shiny listing photos.
But lift the hood, and underneath sits hundred-year-old plumbing, original wiring, a roof near the end of its life, and a clay sewer line nobody scoped. An old furnace, water heater, and A/C units. Those are not small items. Replacing them over the following five to ten years can run to six figures, and none of it was on the spreadsheet they showed you.
I've owned these cheaper, older properties. They were extremely expensive. I would go so far as to say they're not assets; they're liabilities.
The rent figure deserves the same scrutiny. If a property is marketed at a yield rather than a rent, ask what it is let for now, on a signed lease, to a tenant who has been screened. A projected rent is a hope. It is also one of the most common reasons your financing collapses at the appraisal stage, because the appraiser's independent view of market rent is what the lender uses, not the seller's. I have watched that kill a purchase after the buyer had already paid for the inspection, which I wrote about in why applications get declined.
Bearing in mind the add-on strategy that's often sold alongside this pre-rehab model is to refinance after the renovation, this becomes even more critical. You can't refinance if the appraisal and rents don't measure up to the projections. And often, they don't.
I am not neutral about any of this. In fact, I'm very biased because buying these types of houses cost me dearly.
My own first portfolio was built on the cheapest houses I could find. I scaled it well past 100 properties and then had to sell down hard when repairs, tenant turnovers, vacancies and evictions all arrived in the same period against margins that were far too thin to absorb them. I own 30 today and they outperform everything I had before. The full account is in how I nearly went bankrupt buying US rentals.
What the numbers actually do at that price
I've already mentioned financing, but it's worth digging a little deeper. What nobody selling you a cheap house mentions: the financing prices badly, and the cheaper the house, the worse it gets.
From real mortgage term sheets I obtained for clients on Ohio rentals, a $78,000 loan came in at 8.075% with 3.25% in upfront fees, and crucially it was capped at 65% loan to value rather than the 70% to 75% a foreign national would normally expect. That is an extra 5% to 10% of the purchase price out of your pocket.
Total lender fees on that deal came to 5.8% of the loan, because closing, underwriting and processing fees are fixed dollar amounts that do not shrink with your loan. If you are new to how American investor lending works, I explain the product in my guide to DSCR loans. And the total cash the lender wanted to see, deposit plus costs plus reserves, came to 47.6% of the purchase price. On a cheap house. I have broken the whole thing down with the actual sheets in DSCR loans under $100,000.
What a sub-$100,000 loan actually looked like. Real term sheets I obtained for clients on Ohio rentals, 2026.| Term | On the $78,000 loan |
|---|
| Interest rate | 8.075% |
| Upfront fees | 3.25% |
| Maximum loan to value | 65%, against the 70% to 75% a foreign national normally expects |
| Total lender fees | 5.8% of the loan |
| Total cash the lender wanted to see | 47.6% of the purchase price |
Then there is the operational margin problem, which matters more. A lot more!
A cheap property can show a perfectly healthy debt service coverage ratio (gross rents relative to mortgage payments). While at the same time the actual ownership is running on paper thin margins that don't support the actual cost of ownership.
One of those Ohio deals rented at $1,200 against a total payment of $708, so about $492 a month before management, vacancy, repairs and capital expenditure. One $5,000 furnace consumes ten months of that. A tenant turnover plus a month vacant does similar damage. And vacancy and turnover in those neighborhoods is a lot more frequent than elsewhere.
The margin problem on one of those same Ohio deals.| Line | Amount |
|---|
| Monthly rent | $1,200 |
| Total monthly mortgage payment | ($708) |
| Cushion, before management, vacancy, repairs and capex | $492 |
| One replacement furnace | ($5,000) |
| Months of that cushion the furnace consumes | 10 |
The ratio tells you the property covers its mortgage. It does not tell you how many bad months it can absorb, and that second number is what decides whether it makes you money or just becomes an expensive headache.
And who lives in it
The last piece of the cheap-house pitch is the part that is hardest to check from abroad: who is actually going to live there.
At this price point in these areas, you are usually looking at housing voucher tenancies (Section 8), and the neighborhood matters far more than the house itself. That is not automatically a problem and plenty of investors run those properties successfully. But the yield you were quoted almost certainly assumed full rent, full occupancy, and a tenant who reports repairs and looks after the place.
One specific thing worth knowing, because it is widely misunderstood: HUD's Fair Market Rent figure is not the rent you will receive. It is an input to a subsidy calculation. The actual voucher is specific to the tenant and their circumstances, and separate rules tie the rent you can charge to comparable unassisted properties nearby. Anyone quoting you a yield built off a Fair Market Rent table is quoting fiction.
What UK tax does to all this
The last thing to point out is the tax issue. I recently ran an experiment where I laid a real UK buy to let property against a comparable US rental side by side. Here's an interesting thing. The US property generated more net operating income, but after UK taxes a UK buyer ended up with significantly less money in the bank than if they'd just stuck to UK buy to let and structured it well.
On the flip side, the US rental property outperformed the UK buy to let for the UK buyer who didn't want to take cash distributions, but instead just held long term with the aim of building long term wealth. And that came down to the financing tools available. The US mortgage got paid off over time, while the UK mortgage was interest only. A smart investor who applied all their cash flow to additional mortgage payments owned their US rental outright with no mortgage within as little as 11 years.
So in short, if it's income to spend today that's your goal, stick to the UK. If instead you're focused on building long term wealth, then the US is a viable alternative, but don't fall for this cheap, pre-rehab model. That won't help you achieve those goals. Not at all. Buy better houses, with better tenants, in better neighborhoods.
I've linked directly to this comparison towards the end of this article so you can see for yourself.
This section describes outcomes, not mechanisms. UK and US tax rules interact in ways that depend entirely on your own circumstances, and nothing here is legal or tax advice. Take advice from an accountant qualified in both countries before you buy or structure anything.
Pitch two: the Florida holiday home
Now the other end of the market, and a completely different problem.
I'll be honest, I know less about this market and model. Also, if you genuinely want to own a property as part investment part personal use, that's totally valid. But it's also highly subjective, with a wildly different decision-making process than the kind of pure-investment approach I and most of my clients take.
The Florida pitch is genuinely appealing. Buy a villa or a condo, use it yourself for a few weeks a year, let it short-term the rest of the time, and the rental income covers the costs while the property appreciates. You get a holiday home and an investment in one purchase.
The first thing to understand is that this is not a rental business. It is a hospitality business. Short-term letting means turnover cleaning, guest communication, dynamic pricing, reviews, seasonal demand and a management fee of 20% to 30% rather than the 8% you would budget on a long-term rental. That is a real operating business run in a market you do not live in. Also worth mentioning, I'd be terrible at this. I'm a great landlord. I'd make a horrible host.
I do not do short-term rentals and I do not own anything in Florida, so I am not going to pretend to first-hand experience of running one. What I do have is a steady stream of clients coming to me from that market, and what they tell me is consistent enough to be worth passing on.
The Florida cost stack
Florida's difficulty is not the houses. It is what it now costs to hold one.
Insurance is the headline. Florida premiums run about 181% above the national average as at July 2026, with average homeowners cover around $3,815 a year and rising. Flood cover through the federal program has been increasing 15% to 18% annually. For a British buyer used to a few hundred pounds of landlord insurance, that is a different order of expense entirely, and it is not optional.
Then the association fees. Most Florida holiday-home communities carry homeowners association fees, and many carry community development district charges on top. Those have risen sharply, with annual increases on July 2026 data of 17.2% in Tampa, 16.7% in Orlando and 16.2% in Fort Lauderdale, the largest in the country.
On this point, I would personally never buy a property in an HOA. I never have, but I've also heard nothing but nightmare stories about fees and over-zealous HOA boards imposing mostly ridiculous rules and fines on owners. No thank you.
Then property taxes, which as a non-resident you pay without the exemptions and assessment caps available to Florida residents. In the UK, your tenant pays the council tax. In America, it's you, the owner.
Stack insurance, association fees, property taxes, short-term management at a quarter of gross, seasonal vacancy and maintenance, and the gap between gross yield and net return in Florida is wider than almost anywhere else I look at. Again, what looked great on paper often turns into an overall annual loss in reality. And that's a loss you have to subsidize with your own money.
The condo problem
If the pitch involves a condo rather than a house, there is something specific you need to understand, and it is the reason I have avoided condos entirely for years.
After the Surfside building collapse in 2021, Florida changed its law. Buildings of three storeys or more must now complete milestone structural inspections and fully fund their reserves, and association boards can no longer vote to waive those contributions. The grace period ended on 1 January 2026.
The consequence is a wave of special assessments: one-off bills to owners to cover work that should have been funded gradually over decades. They are running from $10,000 to over $200,000 per unit, and there are documented cases of buildings assessing $134,000 and even $400,000 per unit.
Several of my Canadian clients are currently selling Florida condos for exactly this reason. In some cases the assessment they are being asked to fund is worth more than the condo itself. That is not a market dip. That is a bill arriving that exceeds the value of the asset it relates to.
As a result, the condo market has repriced accordingly. On July 2026 data, Florida condo values are down about 9.9% statewide, there are 13.2 months of supply (6 months is considered a balanced market), and around 92% of major condo markets are declining. Of more than 20,000 South Florida condos listed recently, over 17,000 sat in buildings 30 years or older, which are precisely the ones caught by the new rules.
And there is a financing trap on top. Buildings with open violations, pending litigation or inadequate insurance can become unfinanceable, meaning the mainstream mortgage market will not lend on them at all. Others are lendable only at higher rates and larger deposits. So you can end up owning something you cannot easily sell, because your buyer cannot get a mortgage on it.
The one thing to remember: if the return depends on a number nobody has contracted to pay you, it is not a return, it is a projection. A signed lease is a fact. A yield on a brochure is an opinion, produced by the person taking your money.
Where the marketing points British buyers
Here is the pattern I would want you to notice.
Florida analysts currently name the state's most exposed markets as Cape Coral, Lehigh Acres, and parts of Kissimmee and Davenport, along with vacation-rental areas like Daytona Beach. Kissimmee and Davenport are the Disney corridor. They are where British buyers are shown villas.
Cape Coral is, as at July 2026, the worst-performing housing market in America. One analysis ranked it last of 123 midsize metro markets. Prices have fallen in 12 of the past 13 months, more than half of active listings have taken price cuts, and inventory is above 14,000 homes, the highest in over a decade. Depending on which dataset and window you use, values are down somewhere between 3.8% and 10.2% over the year, and I would treat the whole range as the honest answer rather than pick the most dramatic figure.
Across Florida on the same July 2026 data, the steepest declines are Cape Coral at around 10%, North Port at about 9%, and Tampa at about 4%, with the statewide median down 5.5% from $396,000 to $374,000.
So the areas marketed hardest to overseas buyers are, right now, the areas correcting hardest. That is not a coincidence. Speculative demand from buyers who do not live locally is exactly what inflates a market during a boom and disappears first when it turns.
All that said, if you really want to own in these markets, now might be the time to pick up a bargain.
Why "you can use it yourself" is the tell
Of everything in the Florida pitch, this is the line I would pay most attention to, because it sounds like a bonus and it is actually the flaw.
A property you holiday in is not an investment property. Personal use changes your tax position, complicates your financing, and removes exactly the weeks you would otherwise be letting at peak rates. It also, quietly, changes how you make the decision. You stop assessing a spreadsheet and start imagining a swimming pool.
That is not a criticism of buying a holiday home. If you want one and you can afford it, buy one and enjoy it. Just make the decision honestly. A lifestyle purchase that partly pays for itself is a perfectly reasonable thing to want. It is a different thing from an investment, and the two get deliberately blurred because the blur is what sells.
To be fair: a reset, not a collapse
I have been hard on Florida, so here is the other side, because it is true and because you should not take a one-sided view from anyone, including me.
What is happening there is better described as a reset than a crash. Anyone who bought before 2020 is still substantially ahead even after a 10% fall, because prices rose 50% to 60% in some metros during the boom. Single-family stock is holding up considerably better than condos, with roughly 4.7 months of supply and a statewide median around $425,000 as at July 2026. And the flood of inventory is coming from voluntary sellers and builders, not from foreclosures, which is a meaningfully different situation.
The genuinely exposed group is narrower than the headlines suggest: buyers who paid near the 2022 peak using aggressive financing, and owners of older coastal condos facing reserve mandates. If you are neither, Florida in 2026 is arguably a better entry point than it has been for years, provided you have actually calculated the full carrying cost including wind and flood cover.
That is the honest position. Florida is not a bad market. It is an expensive market to hold, at a moment when a lot of people are discovering what holding it really costs.
The questions that expose either pitch
The same handful of questions works on both.
What is it let for right now, on a signed lease? Not projected. Not "achievable." Signed.
Who inspected it, and can I see the report? An independent inspection, not the seller's photographs. My due diligence checklist covers what to look for.
What was actually replaced, as opposed to painted over? Ask specifically about the roof, the plumbing, the electrical panel and wiring, the furnace, and the sewer line.
What is the total annual cost of holding this? Insurance, property taxes, association and district fees, management, and a genuine allowance for maintenance and capital expenditure. Then subtract it from the rent before you look at the yield.
For a condo, what does the reserve study say and is there an assessment pending? If nobody can answer that in writing, walk away.
What have comparable properties on that street actually sold for? Not asking prices. Completed sales.
And what is my exit? Who buys this from me, and can they get a mortgage on it?
What I do instead
For the sake of transparency, my own approach is deliberately dull. Single-family houses, minimum 1,000 square feet, three bedrooms and two bathrooms or better, in Midwest neighborhoods with genuine homeowner demand rather than wall-to-wall rentals. In terms of renovation, everything replaced rather than covered up. A tenant in place on a signed lease before completion. Long-term letting, never short-term. My reasoning on market selection is in the markets I buy in and why.
That's my approach, but it's not the only valid one. Plenty of people do well with strategies I avoid. But it is worth knowing that when I am cautious about cheap houses and Florida condos, it is not because I have read about the problems. It is because I ran a portfolio of cheap houses into the ground and learned what deferred maintenance and thin margins actually do.
If you are weighing the wider question of whether American property suits you at all, I have compared it against UK buy-to-let honestly in is buy-to-let in the USA a good investment, and the financing side in buy-to-let mortgages in the USA.
And if you want to pressure-test a specific deal before you speak to anybody, the free tools in my investor starter kit will size it and tell you what it really costs to get in.
The bottom line
Both pitches can be dressed up convincingly. Both rely on you accepting a number that has not been contracted by anyone, and on being too far away to check.
The cheap house hides its cost in what was not replaced, who lives there, and financing that prices badly at the bottom of the market. The Florida holiday home hides its cost in insurance, association fees, and in the case of condos, a reserve bill that can exceed what the unit is worth.
Neither market is the problem. In both cases what you buy decides the outcome, and the single best protection is refusing to accept a projection where a contract should be.
Remember, investing is a game of probabilities. Ask for the signed lease, the inspection report, and the full cost of holding it. If any of the three is missing, you have your answer.
This article is general information, not legal, tax, or financial advice. Cashflow Rentals is a real estate consultancy, not a lender, mortgage broker, tax adviser, or law firm. It describes marketing models we have encountered rather than any specific company. Market figures, insurance costs, association fees and legislative requirements change, and figures quoted are current as of July 2026. David has no direct experience of owning Florida property; the Florida observations come from published market data and from clients selling in that market. Always take your own professional advice and carry out your own due diligence before buying US property.
