Owing a property abroad - would like to hear people's experiences

tlc678910

An old colleague of mine bought a Florida villa as they had enjoyed a couple of holidays out there. They had not fully realised his much management fees, ground rent and service charges would be or the cost of running air con all the time even when the place is vacant.

They had hoped that family and friends would use it for holidays as well as letting it through an agent. Cue global recession leading to massive oversupply of holiday lets and plummeting values and then to top it off the oil spill on the Florida gulf to put people off.

At the time I wondered why they didn't just buy a little house in the UK to rent out and use any profits towards their own hols. The flights are most of the cost with Florida anyway. Not sure that would work so much now with the government putting in place legislation to make buy to let less profitable and (who knows) there may be more to come.

Another person we knew bought in Spain and (I believe this is how it works apologies if I'm wrong) the agent took the money. I think it's agent out there not solicitor? I know scams can happen anywhere but the language barrier and lack of knowledge of reputable agents can't have helped.

Of course lots of people must have had great experiences but it's all food for thought.

Tlc

quotememiserable

Because you can't afford London, why make Spain second choice? What about elsewhere in England, so you don't have exchange rate changes to cause issues, and it's much easier to visit if you need to. In some smaller Yorkshire towns properties are very cheap compared to your part of the country, so you can also spread the risk by going with a portfolio. Gross returns are around 10%. It's important to find someone (eg, good lettings agent) who knows the area well and can point you at rentable areas.

OneInTheHat

Thanks everyone, sorry I've been busy at work and not had a chance to reply. I'm going over again in a week or so's time so will go and have a good look around there. The property is near Cancelada. The lawyers I happen to know (through lawyer friends here).

The problem with my pension (as that would be the first natural place to put money) is that I am starting again after a divorce so starting with zero pension (my ex husband had a final salary pension and I did not get awarded a pension sharing order, it's a long story...) so I am limited in how much I can put in a pension each year (by my salary and annual allowance constraints).

You're right about the money laundering btw - any money transferred there is regarded with great suspicion, I have heard that from many people.

A friend at work has a place in Portugal and loves it (on one of those golf complexes) - it does seem (bureaucratically) an easier place to buy.

I'll go over and have a proper think about it.

Bluebirdman_of_Alcathays

If you genuinely love the area, go for it. As a pension vehicle I can't think of many worse - sorry if that's too honest.

ognum

Bluebirdman_of_Alcathays wrote: »

If you genuinely love the area, go for it. As a pension vehicle I can't think of many worse - sorry if that's too honest.

I agree with this wholeheartedly. If you really want to do this for you follow your heart and do it.

However, don't use it as your pension!

seven-day-weekend

We bought a property in Las Alpujarras, Grananda, Spain in 2003, renovated it, lived in it for eight years and sold it in 2011.

We broke even with the money, but were very lucky to sell it at all, we had one viewing and that guy bought it ( at much lower than the asking price).

Many properties do not sell at all.

I think coastal areas are even worse, personally, unless things have changerd since we left.

My recommendation is do not buy off -plan or even a new build, and employ an independent bilingual solicitor, even though it is not necessary in Spain to have a solicitor at all, to make sure, amongst other things, that the property is legal.

Even though our property was legal, the paperwork was horrendous and we would never have managed without our solicitor.

Also don't forget the many taxes you will have to pay on both buying and selling.

Hope this helps.

ETA: I agree with others, do not regard it as an investment and certsainly not a a home for your pension. Only do it if you can afford to walk away from it. We always could have done that if necessary.

If you want a vehicle for your pension, buy property in a different area of the UK. Something like our investment property, which is on this development (although a different style of apartment).

http://www.rightmove.co.uk/property-for-sale/property-59750321.html

marksoton

Really interesting thread.

With a lot of people seeming to have regrets. Seems it's a good place to live and intergrate. But not for investing.

How refreshing.

-taff

Pain in the bum, hotels are cheaper.

mumps

I know someone who bought a few years ago, he bought his place for about 25% of what it cost the previous owner. I guess that means he got a bargain but I've never been to Spain and have no idea. It has worked well for his family. His parents are not in good health and they go there every winter for 4 or 5 months, it has been very good for them. He takes six weeks off in the summer and goes out there with his kids for the school holidays. I think they have a couple of shorter breaks as well. They always went to Spain anyway so don't really want to go anywhere else.

Because the family use it so much I think it has worked out as good value for them.

He says he could sell at a profit but I don't know if that is true. It doesn't really matter to him as he intends to retire there in a few years. He plans to retire early as soon as his kids are independent so has no plans to sell. I guess everyone's circumstances are different.

ognum

mumps wrote: »

I know someone who bought a few years ago, he bought his place for about 25% of what it cost the previous owner. I guess that means he got a bargain but I've never been to Spain and have no idea. It has worked well for his family. His parents are not in good health and they go there every winter for 4 or 5 months, it has been very good for them. He takes six weeks off in the summer and goes out there with his kids for the school holidays. I think they have a couple of shorter breaks as well. They always went to Spain anyway so don't really want to go anywhere else.

Because the family use it so much I think it has worked out as good value for them.

He says he could sell at a profit but I don't know if that is true. It doesn't really matter to him as he intends to retire there in a few years. He plans to retire early as soon as his kids are independent so has no plans to sell. I guess everyone's circumstances are different.

Sounds like he has done the right thing for his family and he may well sell it at a profit but he has paid to upkeep it, taxes, utilities, repair and updating, has he factored all those into his profit?

The OP asked about it as a pension plan, even your friend who can perhaps make a profit will not have made enough to keep him in his old age if he sells. Good he enjoys it though.