1st time buying a flat - and so so sorry for this!!!

jumperabv3

Suziflooze wrote: »

I think it's possibly cold feet... You have already changed the money so you won't lose any more unless you change it back and pull out, so the fluctuations won't affect your purchase any more right now. Presumably this is a long term investment which, as you say you have down loads of research on, will pay for itself, I.e. the rent should cover the costs, you said it was savings so no mortgage, so even IF house prices drop, you can hold onto it until they come back up again presumably... You are not looking to sell it again now, I would imagine we are talking years...? In the meantime you are making rental income...

Anyhow you stand to lose more money if you pull out now and change back to $$ in exchange rate and penalties than any likely future loss I would have thought because you will be making rental income as you said this is from savings not a mortgage...

That is correct.
I'm just not sure there will be rental if Europe goes bust - who would like to live in Europe or London (even for work) if their currency worth nothing?
Most immigrants come to London to work and send £££ back to their home country but now the £££ is smashed and is getting smashed more - what can you do now?

I might be looking at it on a day to day basis, when I did the exchange everything was "calm", suddenly I was lucky to do it just right before the "market has decided" that Greece is danger to Europe ... I was aware of the issues with Greece and Europe ... I just never thought it would be so bad the way it looks now ... it's scary, and I don't know how to swallow this .... I also thought the £££ is not the same as €€€ but guess what ... it's losing value more than that euro itself ...

It lost as someone said more than 1000 pips ... the Euro lost less than that ... and I still think the Euro is "expensive", it's a currency that would be toilet paper soon. I just thought the fact the UK hasn't joined that single currency would make it better, not worse - guess I was wrong.

ILW

Was there no NY property worth investing in?

pinkteapot

Unfortunately OP, this is the downside of investing in foreign currency-denominated assets. I'm in the UK and have some units in a USD fund. There have been times when the Fund has performed well and the value is up, but when converted into GBP my performance is flat or even down.

Since you've exchanged contracts, you have to complete the purchase of the flat. If you're suggesting that you are considering selling it again straight away, I can't see how that would be a good idea. You'd have wasted all of your buying and selling fees (substantial amounts on a property of that value).

Exchange rates can move a lot in a short space of time. You went into this as a long-term investment and you have to keep thinking of it that way. Don't evaluate it on a weekly/monthly basis. What happens in the first few weeks is irrelevant if you're looking at this as, say, a ten-year thing.

jumperabv3

pinkteapot wrote: »

Unfortunately OP, this is the downside of investing in foreign currency-denominated assets. I'm in the UK and have some units in a USD fund. There have been times when the Fund has performed well and the value is up, but when converted into GBP my performance is flat or even down.

Since you've exchanged contracts, you have to complete the purchase of the flat. If you're suggesting that you are considering selling it again straight away, I can't see how that would be a good idea. You'd have wasted all of your buying and selling fees (substantial amounts on a property of that value).

Exchange rates can move a lot in a short space of time. You went into this as a long-term investment and you have to keep thinking of it that way. Don't evaluate it on a weekly/monthly basis. What happens in the first few weeks is irrelevant if you're looking at this as, say, a ten-year thing.

I totally understand it.
Yes, it is a long term investment - I just wish this downside of the market would happen 3-4 years after the investment has started, then I would have been less worried.

This is something that is happening even BEFORE COMPLETION, only exchanges took place - so you can imagine how it feels! It's 1st time investment and I get to start on the VERY LEFT FOOT of it ...

Rent is not going to come in less than 3 months from now minimum, and I can convert the GBP back to USD with a $40,000 loss ... the question is if it's worth it or not ... how big the mess in Europe is going to be? It looks to me like we're entering the crash, so perhaps pulling out now with a $40,000 loss might be a good idea ... it's not really pulling out, it's just sticking to the USD for now until the crashes take place .... it looks worse than 2008 to be honest ... they say some currencies (EUR-JPY) are in lows of more than 12 years now ..... it looks terrifying to me.

ILW

jumperabv3 wrote: »

I totally understand it.
Yes, it is a long term investment - I just wish this downside of the market would happen 3-4 years after the investment has started, then I would have been less worried.

This is something that is happening even BEFORE COMPLETION, only exchanges took place - so you can imagine how it feels! It's 1st time investment and I get to start on the VERY LEFT FOOT of it ...

Rent is not going to come in less than 3 months from now minimum, and I can convert the GBP back to USD with a $40,000 loss ... the question is if it's worth it or not ... how big the mess in Europe is going to be? It looks to me like we're entering the crash, so perhaps pulling out now with a $40,000 loss might be a good idea ... it's not really pulling out, it's just sticking to the USD for now until the crashes take place .... it looks worse than 2008 to be honest ... they say some currencies (EUR-JPY) are in lows of more than 12 years now ..... it looks terrifying to me.

If you have exchanged contracts, you cannot legally pull out of the deal.

DRP

DannyboyMidlands wrote: »

I don't see why this has suddenly become a worry. Exchange rates are always going to fluctuate.

yes exactly.

If your investment is suffficiently long term then current jitters and medium-term trends are irrelevant.

This type of investment was always going to be expensive, a bit complicated to manage and likely to have its ups and downs. Given that you are in a slightly reactive/panicky frame of mind already , I'm surprised you went for this in the first place!!

patd1967

This thread sounds like the typical greedy yank who thought he could come to the uk and make a fast buck and fell on his proverbial fat !!!!!! get a life you've bought a flat so move on!!!

lowlitmemory

Stop panicking. You weren't intending to buy it and sell it within the year so you haven't actually lost anything, let alone $40k!

Presumably you are wanting to hold on to this flat for a while. Who knows what the market and the exchange rate will be by then. It is THEN you can calculate gains and losses. Rises and falls in the exchange rate have no actual bearing on the flat you have bought. You haven't "made" or "lost" any money until you actually sell it on and make the calculations.

jumperabv3

DRP wrote: »

yes exactly.

If your investment is suffficiently long term then current jitters and medium-term trends are irrelevant.

This type of investment was always going to be expensive, a bit complicated to manage and likely to have its ups and downs. Given that you are in a slightly reactive/panicky frame of mind already , I'm surprised you went for this in the first place!!

If you have invested $600,000 you saved all your life ... and now the investment hasn't started yet and you are $40,000 DOWN - would you feel you are investing in the right place?

It's abnormal for a currency to lose 1000 pips in a week, that means there are serious troubles behind it. (From $1.63 to $1.53) .... We are going to experience something worse than Lehman Brothers in 2008, this is the entire European continent that is in troubles now ... I don't know when this will end ... I fear the GBP would go to be $1.00 (Parity), that's how I feel - which is why I don't know what to do ... it's losing value every day, it's completely unstoppable ....

I say it again, I haven't bought the flat yet (completely, I have the money), and I'm already experiencing this - this is why I don't know how to proceed, it's my first time and I got hit really badly.

jumperabv3

lowlitmemory wrote: »

Stop panicking. You weren't intending to buy it and sell it within the year so you haven't actually lost anything, let alone $40k!

Presumably you are wanting to hold on to this flat for a while. Who knows what the market and the exchange rate will be by then. It is THEN you can calculate gains and losses. Rises and falls in the exchange rate have no actual bearing on the flat you have bought. You haven't "made" or "lost" any money until you actually sell it on and make the calculations.

How can you think long term where your investment on paper is already $40k down? Am I being wrong for this?