Buy to let property abroad

first78

My parents are currently thinking of selling a property they own in Portugal. They have had a couple renting it for £1100 per month for the last 15 years. The property is 5 bedrooms with a good bit of land and the first valuation they had was £230k...I think they were expecting more around the 300k mark.

I don't really have any savings but wondered if there's any way I could buy their house and have it was a holiday let business...or keep the current long term tenant in there? Would very much appreciate any advice.

G_M

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Yes, assuming you can afford it you could do this. However

* what do you know about Porugese letting law? Tax?
* who/how would it be managed /maintained?
* is it financially viable as a holiday rental?
* why buy this one? If you seriously want a holiday let business why not go over, research available properties, and buy the one most suitable? Or would you get a discount on the price from your parents? (consider Inheritance Tax on gifts).

Thrugelmir

first78 wrote: »

the first valuation they had was £230k...I think they were expecting more around the 300k mark.

Not a good investment then. Do they have a mortgage to settle?

booksurr

first78 wrote: »

I don't really have any savings but wondered if there's any way I could buy their house

to become owner of a property you :

either
buy it from the current owners paying them in cash whatever price they agree to. Without savings your cash would have to be borrowed by you from a lender. That is called getting a loan or mortgage. Given the property is in Portugal finding someone to lend you the money given you have "no" savings is dreamland.

or
the current owners give it to you for free or in return for you paying it off via installments over a long period (a "private mortgage"). The owners would then have to pay UK Capital Gains Tax on the gain they make "selling" the property to you, plus any Portuguese taxes they are presumably already aware of, subject to the terms of the |UK & Portugal tax treaty. Why not ask your parents what they would be willing to do before you spend more time in dreamland

agrinnall

Utter madness.

karcher

You've no savings yet you want to buy a property worth £230K.

How exactly are you you going to pay for it?

first78

Thrugelmir wrote: »

Not a good investment then. Do they have a mortgage to settle?

No there's no mortgage, they built the property themselves and bought the land outright. I lived there as a teenager so I know the house and the area. I don't think it would be hard to find someone to manage the property for me.

first78

karcher wrote: »

You've no savings yet you want to buy a property worth £230K.

How exactly are you you going to pay for it?

I don't know, I wondered if it would be possible to loan the money I feel I had a business plan to show how much money I could make, or whether it's possible to take out a second mortgage as I already have one for my current home.

This is all new to me so I'm just posting to see if there's any way it could be possible to do this.

booksurr

first78 wrote: »

I don't know, I wondered if it would be possible to loan the money I feel I had a business plan to show how much money I could make, or whether it's possible to take out a second mortgage as I already have one for my current home.

This is all new to me so I'm just posting to see if there's any way it could be possible to do this.

please learn the difference: you borrow money, you do not "loan" it. A lender loans to you. You borrow from a lender. You do not loan the money from a lender. It is reasonable to say "take a loan from a lender", but you cannot "to loan"

without savings and therefore the ability to put down a deposit you are never going to get a loan from anyone. Add in that you want a second mortgage and the property is overseas then you can forget the idea until you have money of your own

martindow

Why are you're parents thinking of selling? It strikes me that maybe once costs and taxes have been deducted it is not as profitable as it seems.

Assuming it is profitable, I suppose if the reason for selling could be that they don't want the hassle of looking after it. You could offer to be their agent and take a cut of the profit. How is your Portuguese - no doubt you would have to deal with local bureaucracy and taxes and to get people in to do repairs and maintenance.

AdrianC

OK, so you rent this £230k property for £1100/mo. That's a yield of just over 5.5%. Now take all the costs off it. Now consider the blood pressure and paperwork and possible brexit implications and...

WHY?