Once you’ve purchased your property in America, you may think all the hard work is done, but if its in the right zone and you intend for it to be a holiday let, there are a number of other steps you will need to take.

Insurance will be your first priority. If you bought your property with an American mortgage, an insurance policy would have to be in place before completion of the purchase as a condition of the loan. However, regardless of your method of payment, you will still need insurance. You essentially need an all-risk insurance policy that ensures sufficient coverage should your property be destroyed for any reason. At this point, it is worth checking to see if your property lies in an area subject to extreme weather conditions: floods, hurricanes, tornadoes or earthquakes because you may need to pay extra for additional coverage.

If your intention is to rent your property out as a long-term let (six months or more), you would not need to furnish the property because unfurnished rentals are common in America. In these cases, renters are advised to take out renters insurance to cover all personal possessions. However, a property that is a holiday let would include fixtures, fittings, furnishings and many residual items so you would need to ensure you have adequate contents coverage. If your property is a unit within a condominium complex, you will be required to pay for a condominium policy that will cover your contents as well as your share of the whole building.

You may be considering managing your own rental but you will need to check local government restrictions because in some states you are required by law to enlist the services of a property management company. Property managers do not necessarily need to have a licence although some states require them to have a real estate brokers’ licence and some just require them to be registered with the state. You would be wise to seek references because the property manager will not only be responsible for the care of your property; they will also be instrumental in listing and marketing your property and will help negotiate leases.

Property managers generally equate to peace of mind. In exchange for a small percentage of your monthly rental income, they will take on board the hassles of being a landlord. They will be knowledgeable about local landlord-tenant laws and have policies in place to deal with non-paying tenants. They will also be on call 24/7 to deal with any maintenance issues or emergencies. Some may even manage your accounts and prepare your year-end taxes.

However, unlike British rental agencies, American property management companies may have a variety of fees for different services:

• Management fees – approximately 10 percent of rental income

• Vacancy fees $50/month (may be charged when property is vacant)

• Set-up fee $50-$300 (one-time cost)

• Leasing fee – 25-100 percent of first month’s rent (may be part of the management fee)

Management fees and leasing fees need to be studied carefully before signing a contract because you want to ensure that it is in the company’s best interests to find you tenants quickly and to avoid a high turnover of tenants. You need to find out if they use a leasing agent and if advertising is exclusive or if you are also allowed to find tenants.

Fees that may be additional to the leasing fee:

• Advertising fees $100-$200

• Lease renewals $50-$200

• Reserve fund fee $200-$500

• Maintenance fees $30-$40/hr

• Eviction fees $500-$600

• Unpaid invoice fee 1.5 percent of invoice

• Bill payment fee – usually no additional charge, but some companies may not provide this service

• Sales commission if property is sold – some management firms require exclusive rights to market your property and will request 1-3 percent of the sales price as a commission

• Extra duties fees – if you require additional services beyond the basic contract, you may be charged additional fees

• Other income – find out who keeps what portion of late fees, pet deposits, lease violation fees, returned check fees and interest on security deposits

Finally, British investors need to be aware that rental income from property located in the United States and the gain from its sale will always be classified as a US source of income and subject to tax in the United States regardless of your status and regardless of whether the United States has an income treaty with the United Kingdom. You would be advised to check the IRS website here for more details.

For details of property for sale in America, visit the USA listings on Rightmove Overseas. One way to save money when buying in the USA is to use a currency specialist when transferring your pounds into dollars to complete the purchase of your property. For more information on this, contact Smart Currency Exchange.

To understand the full step-by-step process to buying a property in America, collect The Overseas Guides Company’s ‘USA Property Buying Guide’