Buying a property abroad-anyone done it/know anything about it?

[New Start Neil]

Greetings GC gurus...

SWMBO & I are thinking about buying a property abroad.

The main reason is that we are fed up with seeing the paltry rate our ISAs get.

So, we're thinking if we buy the property outright (just something like a 1 bed apartment) and rent it out, we could hopefully recoup our investment via renting it out after 5-10 years (the plan would be to keep reinvesting the rental money back into ISAs).

So I'm wondering if there's anyone here that's done it and what pitfalls we need to be aware of and also financial (taxman) implications there are?

All advice/suggestions welcome.

Cheers.

 

[kbfern]

From what I have seen from property rentals on holiday letting sites a lot of properties struggle to get many lets at all.You need to be careful what and where you buy.

Take a look at the site below and see how lets do from area to area.

Holiday Lettings » Holiday Rentals, Villas, Apartments, Cottages

 

[njdbaxter]

dont rent it out as a holiday let then.

wife owns a property in a sub division in Manila and rents it to an elderly couple, paid for by their children who are working in America

 

[New Start Neil]

dont rent it out as a holiday let then.

Why not?

dontwife owns a property in a sub division in Manila and rents it to an elderly couple, paid for by their children who are working in America

Ok.....

 

[njdbaxter]

Why not?



Ok.....

holiday lets in europe arent doing as good as they used to, if serious buy in a area where you can get a fixed tennant, they would look after the property a lot better than tourists

 

[SBT]

I own a 3 bedroom house in Norway,well the wife does,and she rents it to a family member.Never thought about holiday lets,but this way its a steady income

 

[vinny41]

some problems letting here
Britons facing £15,000 fines in Canaries for letting homes and breaking a law that's not been enforced for years | Mail Online

also france
France's holiday homes tax grab: How much more tax will UK owners have to pay on French property? | This is Money

think you need to shortlist which countries you are thinking about

 

[imightbewrong]

Seems to me to be adding a big risk taking a foreign property - all the extra unknowns (like local laws above) plus the extreme remoteness from it. The people in that first story above are potentially facing a huge bill for taking bad advice.

My parents were looking at a spanish property (a pre-build block of holiday flats - I know, I know) a few years ago - they got a bad feeling and pulled out about half way through the build - turned out to be a great move as the market tanked and they are now mostly empty and of little value.

How much better are the returns than a UK property? How much better than the risk-free rate?

 

[johntheexpat]

A bit of a problem with France at the moment, in that the tax regime has, up until now, been really quite favourable. But of course, France, like the rest of Europe is looking for extra money and second homes are being lined up in the sights of the money raisers. Its a two pronged (potential) attack. Firstly the capital gains side of it. At the moment, you have the house for 20 years and there are no gains to be paid, less than that and it is a sliding scale. M Hollande would like to change that to his advantage. Secondly they want to increase the take the state gets on the rental income. Two fairly obvious ways to help raise cash.

Lined up against this are the second home owners. Now if you read some elements of the British press, then this all seems specifically aimed at Brits. But its not, its all second home owners. And a lot of second homes are owned by Parisiens. And they are a force not to be messed with by anyone. Ever!

So, there is a chance that the income will be less attractive by this time next year. There is a better chance that it will still be the same. (Sarko never got anywhere with a similar plan, and you would think he is on the same side as the rich powerful Parisiens)

Having said that, there are some spectacularly good deals on properties at the moment. Paris is, like London, just daft price wise, as are coastal properties with sea views. But come inland and in the big cities there are some blistering deals to be done, even on properies for rent.

(and if you are looking for a holiday home, the bargains are even better )

 

[imightbewrong]

Care to link us to any? Assuming they have the internet over there

 

[imightbewrong]

But yes as above there is, in my opinion, a big risk of random new austerity rules being imposed which will hurt your investment/income. This needs to be priced in when looking at the numbers. E.g. what if we have to pay double the tax in the income? What if we have to pay a 'second home owner's license?' 'what happens we he have to pay double [french version of council tax]' or whathaveyou.

 

[johntheexpat]

But yes as above there is, in my opinion, a big risk of random new austerity rules being imposed which will hurt your investment/income. This needs to be priced in when looking at the numbers. E.g. what if we have to pay double the tax in the income? What if we have to pay a 'second home owner's license?' 'what happens we he have to pay double [french version of council tax]' or whathaveyou.

Like I say, Hollande vs the Parisiens, it will be a battle royal (but not Segolene) and I don't think he can win.

But here's one. Needs a bit of work (and looking at picture 4 I guess it gets a bit chilly in winter), but its looks big has plenty of land at I bet you could knock them down to about 50-55K (euros) Add in agents fees (hammer them down too and Notaires (not much you can do to their fess and you should get it for maybe 65K€ - just under £52K or the price of a posh new car.

Leggett: French Property in Aquitaine Dordogne - near nr Thiviers A pretty Dordogne farmhouse, partially renovated,with large stone barn and half an acre of land, must sell make an offer France REF: 20748NF24 | [12732]

 

[FZR400RRSP]

I'm recently back from a villa in a very nice area called Calahonda on the costa del sol, more or less equidistant between Marbella and malaga.
Some of the property prices there are very tempting.
I was looking at ads where EUR200k properties were having EUR40k slashed off the asking price.
If I could, I would.

 

[johntheexpat]

Is it Mr Incredible who has a share in a property somewhere? He may be one to ask about current market conditions etc etc

 

[kbfern]

That's just time share (Mr I's property)

 

[New Start Neil]

Thanks everyone.

We're not thinking of Spain (or anywhere in the Euro for that matter), but Turkey.

 

[New Start Neil]

I'm recently back from a villa in a very nice area called Calahonda on the costa del sol, more or less equidistant between Marbella and malaga.
Some of the property prices there are very tempting.
I was looking at ads where EUR200k properties were having EUR40k slashed off the asking price.
If I could, I would.

I have relatives in that specific area that own a property sales/rental business, and I can tell you that things are DESPERATE out there at the moment and €40k off of a €200,000 property would be a minimum they would chop off at the mo to sell.

 

[kbfern]

Foreign citizens who can legally buy property in Turkey - CoastlineKeys Real Estate Turkey

Take a read of this, I would say about Turkey though that they seem to have a bit of agro with Syria on a regular basis and owning property over there should be carefully considered as it does have it's fair share of political conflicts and earthquakes from time to time..

 

[FZR400RRSP]

I have relatives in that specific area that own a property sales/rental business, and I can tell you that things are DESPERATE out there at the moment and €40k off of a €200,000 property would be a minimum they would chop off at the mo to sell.

Who is selling, out of interest?
Brits being hit with the recession here, or locals?
In calahonda, I'm guessing it's heavily weighted towards the first option?

 

[Ian J]

I'm recently back from a villa in a very nice area called Calahonda on the costa del sol, more or less equidistant between Marbella and malaga.
Some of the property prices there are very tempting.
I was looking at ads where EUR200k properties were having EUR40k slashed off the asking price.

Calahonda seems to have been designed for ex pat Brits but if you wander up the hill you will see that the higher you get the more unfinished apartment blocks there are.

Property prices have collapsed as there is far too much for sale and no buyers and buying for rental income won't guarantee returns as there is too much property even for holiday lets.

Did you go to the Mandragora restaurant in the Zoco complex as that's my favourite restaurant in Calahonda

 

[New Start Neil]

Who is selling, out of interest?
Brits being hit with the recession here, or locals?
In calahonda, I'm guessing it's heavily weighted towards the first option?

It's a pretty even mixture, but from what I gather, it's mostly Brits, but not by much.

 

[FZR400RRSP]

Did you go to the Mandragora restaurant in the Zoco complex as that's my favourite restaurant in Calahonda

I can't recall restaurant names, we went to a different one every night, either on the 'strip' in Calahonda or down at El Zoco.
Our favourite though, and one I do remember the name of, is Alberts in puerto cabopino.
Been going there since some of the cast of 'El Dorado' got jobs there!

If we were still (squeezed) into our old house, we'd be looking to buy in calahonda now.
And we wouldn't need rental income.
Alas, a bigger house here = no chance.

 

[Ian J]

Our favourite though, and one I do remember the name of, is Alberts in puerto cabopino.

I spent a week in Calahonda in the February half term but Alberts was shut as I think they were doing some out of season renovations.

We go there quite a lot as Calahonda is fairly central and it's easy to get to almost anywhere on the Costa Del Sol from there

 

[DOBLY]

You'll be better off investing in a growing area of Australia - one place where people want to move to, rather than from.

 

[SBT]

You'll be better off investing in a growing area of Australia - one place where people want to move to, rather than from.

All depends on who the people are.I wouldn't move to Australia if you paid me,so not everyone wants to move to