Interesting idea regarding investing in property

Archangel

Hi,

I'm not saying that I'm going to do it, but I'd like to throw the idea up for discussion, pros/cons/etc.

Ok, I'm in debt and paying it off. I want to have a house at some point (probably not going to happen any time soon given the property market here).

Now, I know it's possible to get a mortgage even if you've had financial probs before. I also know it's possible to consolidate stuff on top of a mortgage, now...

As an Idea, I thought, what about getting a mortgage for a property in another country (one that's up and coming [and cheap] and likely to be a good investment). Stick the debts on top of this. Then, rent the house out on a weekly basis throughout the year to holiday makers. You'd probably make enough to cover the mortgage in 1-2 years.

Yeah, if there's nobody taking renting the place you'd have to make sure you could afford the mortgage that month, to cover it.

So, as an idea, what do people think to this?

Thanks,
Luke.

ManAtHome

Well everyone seems to be doing it - what could possibly go wrong...

Do you have any views on countries which are:
up and coming [and cheap]
Likely to be a good investment
Likely to cover the mortgage with holiday-lets

Do you have the cash-flow to cover the mortgage if no rentals? How are you planning to manage the change-overs (laundry, keys, check for damage etc), what are you allowing for annual maintenance, local charges, taxes etc?

Kaz2904

BAD IDEA. My opinion only but rather than look at what you could make try looking at what you could lose? What happens if you can't rent it out? Try sorting through your debts first and putting up an SOA- we'll see if we can help.

Kaz2904

ManAtHome wrote: »

Well everyone seems to be doing it - what could possibly go wrong...

Do you have any views on countries which are:
up and coming [and cheap]
Likely to be a good investment
Likely to cover the mortgage with holiday-lets

Do you have the cash-flow to cover the mortgage if no rentals? How are you planning to manage the change-overs (laundry, keys, check for damage etc), what are you allowing for annual maintenance, local charges, taxes etc?

Your post wasn't here when I posted! You have the points right.

lynzpower

this is a really poor idea.

Where in the world for a start off do you get people wanting to rent "all yer round" Even the carribbean has its hurricanes. And have you seen the price of property there?

if it was that easy we'd al be at it. Take a look at whats happening to the Spanish investment market :eek: and then takes your chance!

I wouldnt touch this idea with a bargepole and I suggest any DFW takes serious advice befroe ebarking on what is likely to be a VERY risky venture.

philwiththepill

Firstly your in debt and you are paying it off. Thats great news your taking responsibility for your debts.

Secondly do not try to get clever, you will end up back in further debt.

bandraoi

Where will you get a mortgage for this property you're planning to invest in?

UK banks won't usually lend on a foreign property.
Foreign banks won't usually lend to a non-resident.

If you could find someone to lend to you, chances are you'd need a heft deposit, ie you might get a 75% loan, not a 125% loan.

Crown

Hi, I actually did buy a BTL property hoping that I would I cash in if we got the olympics and after doing some research and attending a few courses and reading the books I brought the property.

What they dont show you on these TV shows were everyone is making money left right and centre is that Tenants can be complete pains in the !!!! and stop paying there rent. What do you do then? the Mortgage company are not interested and just want there monthy installment.

Since buying the flat I have had the worst 3 years of my life and am now in majot debt buy borrowing and consolidating, and buying again.

I know it works for some people and I do intend on getting back into the property market at some point but I will do it when I actually have a proper deposit and a Emergency fund when the tenants miss there payments.

Just to add before I brought the property I had small amounts of debt but reasonably good credit. I now have terrible credit High, Debts, and a Repossion Order on my flat.

My advice would be to stay clear.

Karmacat

My experiences aren't as bad as Crown's, but I've had problems too - I'm only here because I got into debt while buying a property abroad (I love mse, but still..... lol). Its a good property, in France, with 9 years guaranteed rentals (just had my first rent increase too) under their leaseback scheme. It does rent all year - its a ski area, and the French holiday there in summer.

I have a French mortgage - which isn't covered by the rent, big problem. I subsidise the mortgage and the French accountant and the management company to the tune of two thousand pounds a year. And I took out a loan to pay other costs, so I have a Northern Rock loan, which also costs about two thousand pounds a year. Thats a lot of extra money to find.

I wanted a safe option, with not much work once it was up and running, and I have that. But you pay for safey in low returns, and I didn't cost it properly. So I pay out an extra four thousand pounds a year - the loan finishes in 5 years, and the rent may cover the mortgage by then, but I had a lot of sleepless nights, and a lot of tears.

You have to know a lot, and not be afraid of asking and asking and asking about anything you don't understand, have your budget checked by an accountant, do your sums over and over till you're SURE you understand. If you're currently in debt, I can't tell you how strongly I endorse Crown's advice. Stay clear. Focus on getting debt free. Study the markets by all means, do a dry run of the costings to learn about how to do it, but stay well clear of actually putting any money down for anything (including all those property courses).

Stay clear.

immoral_angeluk

Archangel wrote: »

Hi,

Now, I know it's possible to get a mortgage even if you've had financial probs before. I also know it's possible to consolidate stuff on top of a mortgage, now...

As an Idea, I thought, what about getting a mortgage for a property in another country (one that's up and coming [and cheap] and likely to be a good investment). Stick the debts on top of this. Then, rent the house out on a weekly basis throughout the year to holiday makers. You'd probably make enough to cover the mortgage in 1-2 years.

Hmmmmmmmm.... these words ring alarm bells!

findingmyownway

sounds like a cracking way to get into debt, not out of it!