Investing in property abroad

miss_kc

Hi I recently retired with a small monthly pension and I have a lump sum of 100k sitting in the bank which is getting a low return. My idea was to top up my pension with the interest from my savings but that isn't likely to happen any time soon and I will end up using my capital which I really don't want to do as I worked a long time to get the money in the first place. I have been thinking of investing in a property in Florida, the prices there are still reasonably affordable but they do seem to be starting to increase. I have looked into Colordarcy Investments and for around 70k could get about 400 a month after expenses then potentially my money back plus any profit after around 5 years. Has anyone an views or experience of this type of investment please

droopsnoot

I've looked and looked at overseas property, but never jumped. There are too many unknowns for me - you mention £400 a month after expenses, presumably that's as a holiday let, but how many months occupancy will it have? I suspect "could" is the operative word here.

If you're talking about a structured investment where you buy the propery from that investment company, then after five years you get money back plus (effectively) interest, be vary wary. There are so many ways that can backfire leaving you with a property you can't get rid of. Usually it's a 'guaranteed buyback from the developer', which is lovely if they're still in business in five years.

But I am cynical by nature, so maybe others will have more advice.

gb12345

We've got a number of properties abroad and the yields are excellent (averaging 15% pa on the earliest ones we bought and about 12% overall), but all of them were bought directly from the owners and in a country where we had knowledge of the market and property laws.

Looking at Colordarcy Investment's website, there seems to be too many mentions of guaranteed returns that would make me wary.

Also bear in mind that it is an unregulated investment, so if anything goes wrong you've got no comeback.

miss_kc

Ok thanks for the feedback its not a holiday it's rented to local people droop. I am am wary of buying abroad myself as I haven't got the knowledge its the same with shares and other investments I just end up confused. Maybe I should speak to a financial advisor - I know all investment carries risk but I don't want to take too high a risk

atush

No, you don't want a property in Florida. I own one, and they are expensive to run-the property taxes and insurance are huge.

I am happy to run mine, as it is my US base and where I am from and i will live there in winter when I retire.

With a small pension and 100K you just can't afford a holiday home.

There is an easy answer, that carries much less risk for you 100K- save some in cash, and the rest in income producing equities.

real1314

atush wrote: »

No, you don't want a property in Florida. I own one, and they are expensive to run-the property taxes and insurance are huge.

I am happy to run mine, as it is my US base and where I am from and i will live there in winter when I retire.

With a small pension and 100K you just can't afford a holiday home.

There is an easy answer, that carries much less risk for you 100K- save some in cash, and the rest in income producing equities.

I've been looking at Florida properties, and given the low prices, I assumed there must be some hidden costs - could you give me some idea of what the typical ongoing property / insurance costs are?
Presumable in gated / community developments there are ongoing service fees? What's the typical charge for these?

TIA

atush

First of all, all depends on where you are. My insurance costs are nearly $5K per year, plus property tax all before running costs.

A 3 bed pool home could cost in excess of $20K per annum.

HOA fees for apartments can be hundreds per month, thousands per year depending on the development/facilities. You just don't have the capital and income to support this really. Seen too many brits lose their shirts over there.

robtgossard

All over the world, there are exciting investment opportunities in the real estate. Colordarcy has its offices at many places and provides global services. Though very tough to manage overseas properties, but if Colordarcy offers to get the property tenanted and manage it well on your behalf, it can be a good investment, I suppose. Still, you could wait for some more views on it.

real1314

atush wrote: »

First of all, all depends on where you are. My insurance costs are nearly $5K per year, plus property tax all before running costs.

A 3 bed pool home could cost in excess of $20K per annum.

HOA fees for apartments can be hundreds per month, thousands per year depending on the development/facilities. You just don't have the capital and income to support this really. Seen too many brits lose their shirts over there.

How do you know I don't have the capital? Are you confusing me with the OP?

Your insurance is $5k? for a $200k property? or for something else?

Can you show me some evidence of how your $20k figure has been arrived at?
It seems a lot to be hitting around $400 a week.

atush

Yes, I was thinking of the OP. And no, I am not going to open my books and show them to you- I don't know you. But you can believe me because I own one.

but I can assure you, 100% that a 3 bed pool home in FL will have running costs from $20-25K per year. Ask on any FL home owners forum.

and yes, insurance is that high due to hurricanes, flood insurance etc. Then there are property taxes on top- change due to county but will be around 3K.

Archi_Bald

atush wrote: »

but I can assure you, 100% that a 3 bed pool home in FL will have running costs from $20-25K per year. Ask on any FL home owners forum.

So all you need is a net rental income of some $2K - $3K a month and you are quids in?