Financing An Investment Overseas

[chappers]

Hi, am new to overseas property investment.

I am in the early stages and am doing a lot of research.

My question is this. I have a relatively small mortgage on my home here in the uk, and currently a lot of equity (approx. £200K). Lots of people keep telling me i am in a good position to invest in property. Am I ? Is using equity in your home, in order to finance an overseas property investment, a wise idea ?

And also, can anyone give me a basic illustration of how the finance would work, what i would pay, when, how much per month etc etc, so i can get a real rough idea on how the costs etc would pan out.

[Guest_ringledman_*]

Chappers,

Your in a good position. Your options are to either-

1) Remortgage your UK property and use the equity taken out to buy a property abroad outright. Your mortgage repayments will be based upon how much you take out and what period you want to payback the equity over.

2) Take less equity out, bang it down as a deposit on a couple of foreign off plan properties as deposits. Deposits rang between 10-20% of the value of the properties. then watch the values rise over the build period. On completion take more equity out of your UK home to pay for the outstanding amounts of the value of the price you paid or get a couple of foreign mortgages and leverage your investments for a better return on your investments.

The finace really is the easy bit especially as you have a significant amount of equity to cover you.

The hard part is knowing where to invest in the world and finding a reputable agent.

The best places to invest in the world in my opinion at present are -

1) Poland.

2) Czech Republic.

3) Germany.

Edited September 10, 2007 by ringledman

[catara]

Hi, am new to overseas property investment.

I am in the early stages and am doing a lot of research.

My question is this. I have a relatively small mortgage on my home here in the uk, and currently a lot of equity (approx. £200K). Lots of people keep telling me i am in a good position to invest in property. Am I ? Is using equity in your home, in order to finance an overseas property investment, a wise idea ?

And also, can anyone give me a basic illustration of how the finance would work, what i would pay, when, how much per month etc etc, so i can get a real rough idea on how the costs etc would pan out.

This is what the financial advisors are paid for. Go talk to one. Many uninformed have lost £200K in unwise investments. Do not jump into overseas investments before you have a clear picture.

I would say you would better invest in cities around you, after doing your homework.

[OFS Spain]

If you think about it: that 200,000GBP could purchase around 8 decent properties at around the 100,000 mark on a buy to let basis. (75% LTV mortgage 25,000 down)

There are lots of opportunities available including, private rental scheme's run through local authority systems.

For example.

A lot of our clients purchase property in and around Edinburgh and Manchester. Once purchased they can be passed to the local authority who will guarantee rent for 5 years plus void's (meaning they will pay even if un-occupied). The local authority then guarantee to return the property to the way it was when handed over, fixing damage, stains on carpets etc.

Property in and around Edinburgh for example is increasing around 16-22% per year, meaning that by the time you have finished your 5 year rental program your property will have almost doubled.

In a nutshell, your 200,000 has made you approx 800,000 net in 5 years (including your 200,000 outlay it has made you 1million). With a portfolio totalling 1.6million.

If you tie your properties in with say a foreign currency loan in swiss franc's your interest rate is around the 4% mark, instead of 6-7%

The savings of interest can be put toward the mortgage you took on your main residence, meaning, you could end up paying very little over the next 5 years.

In 5 years, you re-mortgage your 8 properties and buy a further 20 or 30 with your 800,000 profit.

Then you retire.

Roberts your Mother's Brother.

This may sound easy... but it actually is.

Feel free to PM me for any further info.

Alan Macdonald

OFS Spain

www.foreign-currency-mortgages.com

You've worked hard for your money, why not let your money work hard for you.

For no obligation, impartial advice on Local and International Foreign Currency Mortgages, Offshore Investments, Cash Release on property in Spain, Offshore Pensions, Offshore Savings Plans and Offshore Trusts please do not hesitate to email us or contact us at +34 966 774 760. Please visit our website at www.ofsspain.com

[Guest_ringledman_*]

If you think about it: that 200,000GBP could purchase around 8 decent properties at around the 100,000 mark on a buy to let basis. (75% LTV mortgage 25,000 down)

There are lots of opportunities available including, private rental scheme's run through local authority systems.

For example.

A lot of our clients purchase property in and around Edinburgh and Manchester. Once purchased they can be passed to the local authority who will guarantee rent for 5 years plus void's (meaning they will pay even if un-occupied). The local authority then guarantee to return the property to the way it was when handed over, fixing damage, stains on carpets etc.

Property in and around Edinburgh for example is increasing around 16-22% per year, meaning that by the time you have finished your 5 year rental program your property will have almost doubled.

In a nutshell, your 200,000 has made you approx 800,000 net in 5 years (including your 200,000 outlay it has made you 1million). With a portfolio totalling 1.6million.

If you tie your properties in with say a foreign currency loan in swiss franc's your interest rate is around the 4% mark, instead of 6-7%

The savings of interest can be put toward the mortgage you took on your main residence, meaning, you could end up paying very little over the next 5 years.

In 5 years, you re-mortgage your 8 properties and buy a further 20 or 30 with your 800,000 profit.

Then you retire.

Roberts your Mother's Brother.

This may sound easy... but it actually is.

Feel free to PM me for any further info.

Alan Macdonald

OFS Spain

www.foreign-currency-mortgages.com

You've worked hard for your money, why not let your money work hard for you.

For no obligation, impartial advice on Local and International Foreign Currency Mortgages, Offshore Investments, Cash Release on property in Spain, Offshore Pensions, Offshore Savings Plans and Offshore Trusts please do not hesitate to email us or contact us at +34 966 774 760. Please visit our website at www.ofsspain.com

Chappers just be wary of anyone with a vested interest like this guy.

The UK market is f*cked. I live in Manchester and the market is going nowhere.

If you want to make serious capital gains then the CEE (Central, Eastern Europe) area is the only place to do so. Excellent economic growth.

Stay well clear of any properties in Western Europe (UK, Ireland, Spain, France, Portugal) they have had their growth and falls are more than likely.

[markinspain]

Hi, am new to overseas property investment.

I am in the early stages and am doing a lot of research.

My question is this. I have a relatively small mortgage on my home here in the uk, and currently a lot of equity (approx. £200K). Lots of people keep telling me i am in a good position to invest in property. Am I ? Is using equity in your home, in order to finance an overseas property investment, a wise idea ?

And also, can anyone give me a basic illustration of how the finance would work, what i would pay, when, how much per month etc etc, so i can get a real rough idea on how the costs etc would pan out.

My advice to you is as follows:-

1, Decide what country you really want to go to.

2, Live there by RENTING for 6th months first to see if you really like it.

3, Only then assess what the general market situation for property is and begin to fully investigate. Also find a local English speaking lawyer in the country of your choice who has been recommended by more than 3 expats and preferably has no interest in property himself.

I certainly wouldn't follow the gits who try flog their own VI stuff on the internet and really shouldn't be posting that stuff on a site with this name, but for some reason the moderators seem to let them get away with it.

Good Luck.

Edited September 10, 2007 by markinspain

[whiterabbit]

My advice to you is as follows:-

1, Decide what country you really want to go to.

2, Live there by RENTING for 6th months first to see if you really like it.

3, Only then assess what the general market situation for property is and begin to fully investigate. Also find a local English speaking lawyer in the country of your choice who has been recommended by more than 3 expats and preferably has no interest in property himself.

I certainly wouldn't follow the gits who try flog their own VI stuff on the internet and really shouldn't be posting that stuff on a site with this name, but for some reason the moderators seem to let them get away with it.

Good Luck.

Good advice Mark and I agree.

[Guest_ringledman_*]

2, Live there by RENTING for 6th months first to see if you really like it.

Not if its a pure investment. Who is going to giveup their job and move to a country for 6 months just to buy an overseas BTL?

Fine if you are going to emigrate somewhere but for a pure investment you need to just make regular visits beforehand and do a heck of a lot of internet reasearch on the place.

[OFS Spain]

Chappers just be wary of anyone with a vested interest like this guy.

The UK market is f*cked. I live in Manchester and the market is going nowhere.

If you want to make serious capital gains then the CEE (Central, Eastern Europe) area is the only place to do so. Excellent economic growth.

Stay well clear of any properties in Western Europe (UK, Ireland, Spain, France, Portugal) they have had their growth and falls are more than likely.

I have no vested interest and i am not on this post to tout business.

I am merely informing the forum of what other people are doing; very successfully i may add, in the UK.

We have over 100 portfolio clients in the UK, whose portfolios vary from 5-27 properties. In almost every case, they have purchased specifically for Local Authority use (something we do not deal with).

We assist (if required) with a mortgage facility only, but nowhere in my email was i giving any kind of advice, i merely gave an example of what others have done and like i said above, have done very successfully.

The UK Market is not totally f*ucked as you state, you will find significant property price increases beyond the border of England, that is FACT.

see BBC link - http://news.bbc.co.uk/2/shared/spl/hi/in_d.../region12.stm?a

Unlike England where house prices are bartered down, when you purchase a house in Scotland you end up paying way more than the asking price.

Simple Economics 101 - Supply and Demand and there is far more demand than there is Supply.

Plus i agree with ringledman, not many people can put there lives on hold to assess potential investment properties, unless they are retired and plan on moving abroad permanently, which if the case makes perfect sense.

Alan Macdonald

OFS Spain

www.foreign-currency-mortgages.com

You've worked hard for your money, why not let your money work hard for you.

For no obligation, impartial advice on Local and International Foreign Currency Mortgages, Offshore Investments, Cash Release on property in Spain, Offshore Pensions, Offshore Savings Plans and Offshore Trusts please do not hesitate to email us or contact us at +34 966 774 760. Please visit our website at www.ofsspain.com

Edited September 10, 2007 by OFS Spain

[Guest_ringledman_*]

The UK Market is not totally f*ucked as you state, you will find significant property price increases beyond the border of England, that is FACT.

see BBC link - http://news.bbc.co.uk/2/shared/spl/hi/in_d.../region12.stm?a

Unlike England where house prices are bartered down, when you purchase a house in Scotland you end up paying way more than the asking price.

Simple Economics 101 - Supply and Demand and there is far more demand than there is Supply.

I believe in the Warren Buffet school of thought -

When an asset has risen considerably above it mean rate of growth, odds are it will revert back to its mean

UK property is way over its mean growth. The graph on the front page of this website says it all. All this equates to a poor future return on your investment in the UK.

Commercial property returns are already falling, UK residential will be next.

I don't get all this Supply & demand argument. Regardless of the supply & demand issue, the cost of a property all comes down to how much people can afford to pay out of their take home pay. This will limit how much property prices rise. People are already spending a considerable % of their take home pay and this can't continue to rise forever. Add to this the global credit crunch that is going on and it will be much harder for banks to lend in the manner that they have recently.

16-22% return for the next 5 years! what planet are you on! Thats a scandelous projection.

Bellway today stated around 4% for next year and they are a housebuilder! I don't see a crash but expect a lot of stagnation and inflation eating into the true value of UK property.

Your Scotland argument is again a load of tosh. Just because you end up paying more than the asking price it makes it a good investment? that makes no sense at all.

Simple Economics 101- Don't be the last sheep to the UK BTL party. If your going to invest in BTL do it where the return make it worthwhile - i.e. CEE.

And also if you have no vested interest stop going on about your clients and remove your link to your website.

Edited September 10, 2007 by ringledman

[OFS Spain]

Touché

I realise that some people cant afford to get on the property ladder, i presume when they cant, they rent. Therefore, surely, the demand and a need for rental property rises.

I appreciate that future performance is not based on past performance and prices may vary, but i purchased a property in Grangemouth as a BTL in 2003 for 38,000. I released equity in March of this year and had it valued at 82,000. Not bad in 4 years.

Past performance in the central belt (outskirts of edinburgh) has averaged the 20% mark for a long time and seems, according to figures (and a news report in August) to be continuing and that seems to still be the case, even though interest rates are high.

You state that my Scotland argument is tosh, but that is the case as it stands, when property comes on the market an offer is put in, usually, that offer is bettered by someone else and if youre lucky this can happen quite a few times, which yes is a nightmare on a mortgage side of things, as you have to stump up additional funding, but that's the way it is and the way it has been for decades, which suggests and confirms that there is a demand. If there wanst then the price would not be bartered upward. Most adverts in estate agents will have the following quote "Offers over" showing that it is common place.

Like i confirmed before, i was merely giving 1 example of how to play with your equity. I appreciate that there are other ways and better places in the world to invest other than the UK and hopefully more suggestions will be posted here for Chappers.

You have your views and i have mine.. thus the advantages of the forum.

Time and statistics will prove one of us wrong.

If you would like to continue our debate i suggest we move it to the PM's as it is cluttering up the post.

Chappers, good luck in your search.

I noticed you suggested Germany, Poland, Czech Republic. Knowing nothing about these area's from a property point of view can you elaberate further as to your decision on these area's. (i ask this seriously and not part of the debate above)

[Loadsamoney]

Chappers, good luck in your search.

I noticed you suggested Germany, Poland, Czech Republic. Knowing nothing about these area's from a property point of view can you elaberate further as to your decision on these area's. (i ask this seriously and not part of the debate above)

I agree with Poland and Czech Republic - am investing in these countries and yes CEE has a hell of a lot going for it....am unsure though on Germany...altho I guess that is for another thread.

Must depend on what you are interested in Chappers. Best to speak to a mortgage broker first to discuss mortgage options...maybe look into draw down facility.

PS the guy who said speak to financial adviser as this is what they are paid for...certainly does not mean they can advise effectively on property.....I dont know many if any that are clued up on buy to let in emerging markets...

[Guest_ringledman_*]

I think that CEE has the best growth potential over the next decade because-

-Countries moving from an agrarian society to urban (i.e. similar to Spain & Ireland in the 70's)

-Large GDP growth (around 6-7% pa against Western Europe's 2-3% pa)

-Highly educated workforce

-Highly motivated workforce (i.e. Poles with degrees doing manual labour here to make something of their lives)

-High influx of EU money (i.e similar to Spain & Ireland)

-Developing mortgage markets (i.e. people can borrow more which always pushes the market up)

-Large about of Foreign Direct Investment (FDI)

-EU democratic safeguards

-Large Infrastructure spending (i.e. Poland's preperations for EURO 2012 to upgrade the transport networks)

These all relate to the new EU entrants. Germany is a different issue altogether and a good investment because prices have bottomed out after 15years of negative growth + the Merkel effect should increase homeownership.

Edited September 10, 2007 by ringledman

[dogbox]

If you think about it: that 200,000GBP could purchase around 8 decent properties at around the 100,000 mark on a buy to let basis. (75% LTV mortgage 25,000 down)

There are lots of opportunities available including, private rental scheme's run through local authority systems.

For example.

A lot of our clients purchase property in and around Edinburgh and Manchester. Once purchased they can be passed to the local authority who will guarantee rent for 5 years plus void's (meaning they will pay even if un-occupied). The local authority then guarantee to return the property to the way it was when handed over, fixing damage, stains on carpets etc.

Property in and around Edinburgh for example is increasing around 16-22% per year, meaning that by the time you have finished your 5 year rental program your property will have almost doubled.

In a nutshell, your 200,000 has made you approx 800,000 net in 5 years (including your 200,000 outlay it has made you 1million). With a portfolio totalling 1.6million.

If you tie your properties in with say a foreign currency loan in swiss franc's your interest rate is around the 4% mark, instead of 6-7%

The savings of interest can be put toward the mortgage you took on your main residence, meaning, you could end up paying very little over the next 5 years.

In 5 years, you re-mortgage your 8 properties and buy a further 20 or 30 with your 800,000 profit.

Then you retire.

Roberts your Mother's Brother.

This may sound easy... but it actually is.

Feel free to PM me for any further info.

Alan Macdonald

OFS Spain

www.foreign-currency-mortgages.com

You've worked hard for your money, why not let your money work hard for you.

For no obligation, impartial advice on Local and International Foreign Currency Mortgages, Offshore Investments, Cash Release on property in Spain, Offshore Pensions, Offshore Savings Plans and Offshore Trusts please do not hesitate to email us or contact us at +34 966 774 760. Please visit our website at www.ofsspain.com

2 observations here;

1) Those making the kind of 'easy' money to the degree you indicate dont share thier ideas with others on forums, they get on and do it just for themselves. Why would you bother earning a couple of grand commission yourself on one of these arrangements when you could make millions by actualy just doing the thing yourself?

R Branson did'nt have a ring round telling thousands of others how to set up a Virgin megastore, he just did it himself.

City traders dont come on forums telling others how they plan to make millions in the next 5 years. Why would they bother earning piffling bits of commission and fees advising others when they could expend all thier energy just on themsleves and make millions - afterall you tell its so very easy?

2) Investing on the back of price action is not something any thinking investor would necessarily consider prudent. Instead he seeks value which is often pre - price action

I take it you are aware of the many new build flats selling for less than 1/2 price at auction due to repossession? Mmmm, now why would a Bank sell at auction and sell for less than the o/s mortgage if demand was so high?

I'm all for new investment ideas and taking risk, but not for 'advisers' to make thier income form telling others how to do it.

Doers do. Advisers dont.

[snudge]

OFS Spain - Your description of the Scottish 'offers over' system is misinformation in the extreme.

The offers over system is the normal way to sell a property in Scotland's central belt, fixed price comes in for new builds obviously and when the market gets sticky in some places. For much of Edinburgh and parts of Glasgow the offers over system has brought large rewards for home owners because it encourages competition, and it does this by declaring a ridiculously low 'offers over' figure in the first place.

For example a quality one bed flat in the West End of Glasgow values at £150k, the estate agent recommends an offers over of £99950, no I am not joking. The seller would expect to receive offers ranging from just under the actual value, £150k, to anything up to £170k. These bids will all arrive sealed, at a specific time and on a previously agreed closing date that all interested parties will have been made aware of by the selling agent. The seller chooses the winning bid, usually the highest, but an attractive entry date etc. could wing it for someone with a lower bid. Any increasing of offers after the bids have been opened points to illegal activity by the selling agent, simple as that.

Sorry that this deviates from the topic of this thread but some of the information posted in these threads is astonishing.

[Lewis]

NEVER, EVER, EVER, EVER, EVER GAMBLE WITH THE ROOF THAT IS CURRENTLY OVER YOUR HEAD.

You may just end up sleeping in the park if it all goes horribly wrong.

Take a little from your house if you need to but never take more than you can comfortably keep up the payments on if

A - You get it wrong and the deal losese you money

B. - There is a recession and you lose your income.

C. - House prices crash and you may be stuck in neg equity.

NEVER, EVER, buy something that you would not be prepared to live in if all of the above applies it's all you have left.

ALWAYS try to keep it as close to home as your risk comfort zone dictates.

All of the high risk strategies mentioned above have been used and are being used by many thousands of investors - if you can afford to lose it all and still have a smile on your face - follow them. Remember they are more likely to be seasoned investors and have alternative means. Sooner or later there will be tears. What they are doing is not sustainable.

Up to you but you are asking advice and I'm merely countering some of the high risk ploys outlined above.

Germany is my area of expertise and it has done me proud over the years (The largest slice of my retirement wedge has been made in Germany and Scotland and I've been in this business for many years.)

[chappers]

Have to say i have been looking at Germany, and maybe trying to purchase a property in Berlin or somewhere similar to then rent out, and use it purely as an investment. I have heard that Germany could be on the up ?????

What do people reckon about the current climate (high interest rates/going up again?/ usa problems etc), i get the impression you are better off waiting until maybe the new year to invest/purchase ????

[Lewis]

Have to say i have been looking at Germany, and maybe trying to purchase a property in Berlin or somewhere similar to then rent out, and use it purely as an investment. I have heard that Germany could be on the up ?????

What do people reckon about the current climate (high interest rates/going up again?/ usa problems etc), i get the impression you are better off waiting until maybe the new year to invest/purchase ????

Whether Germany is on the up is a matter of from who's perspective.

It is the largest exporter in the world, the third largest economy in the world, richest nation in Europe, unemployment falling,

finest infrastructure in Europe, beautiful country, educated motivated workforce, cheaper cost of living than UK. Sounds wonderful doesn't it?

Yet even given this info there are doomsayers and I won't argue with them. What the future holds is not clear.

There are areas which offer stagnation and high prices.

There are areas which have hit rock bottom and show signs of improvement.

My money is going into Dresden/Leipzig and the satellite cities around Berlin

If you were looking for a holiday/retirement place for yourself it would be easy I would just tell you to find your favourite spot and buy - you would not be disappointed.

Out and out investment, BTL is not so clear.

In the areas outlined above the prices are so low they can logically only go one way - the milllion dollar question is, How long will that take? I suggest ten years and it will appear to be a sound, safe investment. No get rich quick in Germany I'm afraid.

But - it will be difficult to lose your shirt in Germany providing you have local guidance.

I spend at least half the year near Dresden and there really is nowhere I'd rather be or have my pot invested.

Hope this helps

[chappers]

In the areas outlined above the prices are so low they can logically only go one way - the milllion dollar question is, How long will that take? I suggest ten years and it will appear to be a sound, safe investment. No get rich quick in Germany I'm afraid.

But - it will be difficult to lose your shirt in Germany providing you have local guidance.

To be honest i would be looking i think, at an investment, and my idea would be to have something which in 10-15 years time i could stand a very real chance of selling and making money from. I am 38 and like the idea of buying something, which whilst i have it, i can rent out and cover my costs. Then as i said above, selling it in 10-15 years time, and make some money ahead of my retirement. Correct me if i am wrong, but i think this would mean looking at a city location, where renting out is going to be relatively easy. Germany, from what i have read, does seem to be a possible, if you are looking at a long term investment ??

I realise nothing is certain, and nothing is risk free, but I see this potential opportunity of investing in property as a possible means of producing a nice little nestegg for retirement.

Maybe some of you out there will disagree with this plan, maybe there is a better way of attempting to build up a retirement fund, please let me know if you think so.