Overseas property or UK buy to let ?

sconieroany

Hi folks, My wife and I are thinking of buying an additional property, the main reason is to build some equity that can assist in our retirement and help our kids to get on the property ladder in the future.

We have looked at local flats that would fit the bill, but have started to consider whether we should look at overseas property, this would act as a holiday home plus give us some rental, it could still be sold down the line or we could spend more of our retirment abroad if we desired, I would be grateful if anyone has some pro's and con's to share, just to give you an idea of what I mean I can pick up a two bed flat in a sought after area here in the Uk for around 80k, but on a recent trip to Florida I could pick up a two bed apartment for around 80k $, with the current good US/Uk exchange rate I must say I was tempted.

We will consider other countries but would like to hear of others experiance of buying abroad.

Thanks

lind_3

Have you considered a leaseback scheme in france or spain
there are pros and cons to this depending on what you want at the end
google a search on this

sanfrancisco

You will help your kids more by NOT buying.

Florida (and all US) market is on a knife edge at the moment, so be careful...

http://money.cnn.com/2006/06/27/news/econo...dex.htm?cnn=yes

inmypocketnottheirs

Hi, really interested to read your post, because you are at the same stage as we were 12 months ago. Except, though, at that stage we were hell bent on buying abroad, for exactly the same reasons, i.e. in place of pension, to help kids etc. However after a lot of thinking, adn a couple of trips to Spain (I speak fluent Spanish) Greece (I speak some Greek) and Malta (I do business there) we ended up buying a one bed flat in our village here!

Why? Because it's easy to manage, despite what the knockers and gloom mongerers here will say I believe that house prices are sustainable and in the long term there is room for growth. Also although we have bought at the very bottom end of the market, there is a shortage in our area of apartments/first time buyer properties, and I am absolutely certain that it is a better investment and less risk than overseas.

HTH and the very best of luck!

sconieroany

sanfrancisco wrote:

You will help your kids more by NOT buying.

Florida (and all US) market is on a knife edge at the moment, so be careful...

http://money.cnn.com/2006/06/27/news/econo...dex.htm?cnn=yes

Hi sorry I can't get your link to work, but I am aware that there is a lot of new houses lying around not sold, in Florida a lot of Uk buyers get sucked into buying a vacation home that is meant to rent out 36 wks plus a year just to pay the bills, but with so many homes in the market you would be lucky to get 12 wks, that's why we are considering a low maint condo/apartment, we would only use it for family and friends and at around £50k for a 2bed home is a cheap way to get a holiday home with a lesser chance of downside than a $350K villa.

The upside to a two bed flat in my own village is that I can maintain and monitor the property and sell it easier if the need should arise, it is probably the sensible choice but a holiday home overseas is an itch I can't scratch, so I want to look into it anyway.

Apart from the states has anyone any other alternitive countries I should look at, I do not want any up and coming third world countries and good sanitation is a must, (the days of Delhi Belly are long past)

lizzyb_3

Hi, we have a rental flat (1 bed) in our City here and also a 2 bed aprtment in Spain. Have just decided to sell and have accepted an offer on the apartment in Spain. The one here is far easier to manage & completely looks after itself. The tennent pays for all their own council tax & bills etc.
You get value for money in Spain but remember if you are letting out as a holiday let you pay for all you gas/Electric/water/community charges etc etc etc. Also build into it the fees you will pay for management & cleans between lets. And estate agents fees to sell are far higher than in the UK but you dont have much choice as you can hardly fly over to do each viewing!
Saying that we have really enjoyed having it & are sad to sell but will be sticking to the UK from now.

sconieroany

Thanks for all your replies so far, the trend seems to be to go with common sence and not to jump in overseas, that may very well be the outcome of this, I can allways find good overseas rentals on the web at bargain basement prices due to the oversupply of villlas and there is no reason to see that changing in the near future.

If we do go down the local flat investment route, do you have any tips on the best way to finance, we have around 160k in equity on our own home and around 20k deposit on an investmant flat ? should I approach my own mortgage lender for the money ?

Thanks again for your time.

Tassotti

Get a BTL mortgage at 85% LTV.

On your 80k investment property, you would need a deposit of 12K.

Speak to an independent mortgage advisor

Most importantly though, work out your yield and see if this is good enough to warrant the hassle of being a LL.

Put some typical rental figures up against purchase prices, and we'll see if its worth it.

Tass

flossy_splodge

What is considered a 'good' yield? Is it as simple as anything that pays at least as much as the best savings accounts or are there other factors that need consideration? Grateful for any details of anyones personal views on this.:o

Tassotti

flossy_splodge wrote:

What is considered a 'good' yield? Is it as simple as anything that pays at least as much as the best savings accounts or are there other factors that need consideration? Grateful for any details of anyones personal views on this.:o

If the yield is equal to the best savings accounts, then this is considered very bad.

Yields on my properties vary from 6% to 15%

Factors that need consideration are void periods, ongoing maintenance, unexpected repairs, bad tenants, interest rates, house prices........and so on.

seven-day-weekend

We have a house in Spain that we live in full-time at the moment.

My advice is, if you are going to buy abroad.....don't buy a property that relies on rental income to pay the mortgage. They are not all rented all throughtthe year and there willl be times when it is empty. Don't forget too that you will have to pay for it to be maintained during your absences.

When our house is used as a holiday home again in a few years, if needs be we can just lock it up, and walk away. This is because we have no expenses on it that are ongoing for which we need rental income (other than miniscule amount of rates). We do not need rental income from it to keep it. Some friends of ours here in the village will keep an eye on it for us, and if anyone does rent it they will do the cleaning etc.

Also, because we are inland in the mountains, crime is not a problem as it is on the coast so we don't have to worry about it being vandalised/sqatted etc.

I personally would have a rental property in the country in which you are resident.....not one that involves at least a few hours flight.