Buying a property abroad

[CrashTester]

I am hoping to buy a property abroad with the intent on it making a little money and for me to use as a holidaty home from time to time and I wanted you guys to advise me of where you think I should buy.

I've been looking for a while and initially settled for Florida, what with it being a big tourist place and all, but Florida is expensive and already an established market so Im worried that there wont be much room for capital appreciation.

Otherwise, Im looking at Turkey or Bulgaria since both these countrys represent great value for money both on the initial investment and they are cheap to visit. They also have the bonus of not being in the EU yet and so proiperty prices will increase if they ever do get in (which could be over 10 years away!)

But recently I've been thinking Ski chalet/apartment with some very good leaseback schemes available in France. It sounds like a safe bet and I will get use out of it yearly.

What do you people think on the subject, what would you go for in my position?

[hook]

My father used to own two so called 'holiday homes'. There used to be one in Spain, in L'Estartit, not too far from the bigger cities, yet about 200 meters away from the sea. Quite a nice place. It was sold recently seeing we didn't have the time to use both of the holiday places as much as we'd like to.

The one we have left is located in Portugal, I honestly have no idea where precisely. It mostly depends on what you want out of your home I Guess. What matters more, making money out of it, or using it for holidays? We originally bought the places simply for the holidays... the fact we, in the end, made some money doing all of that, was just a nice extra.

It boils down to priorities I guess.

[Phalon]

France is still very popular, probably too much so really although you can still get a decent sized house + land for pennies compared to over here. Both my family and a friend's family have properties in south west france.

Personally i'd go for something on the coast because i like surf or maybe in the mountains for skiing.

Buying a property in Bulgaria or Turkey can surely only be risky?

[CrashTester]

Hook - priority is to keep itself financially while I would like to use it occasionally, though not every few weeks. Im thinking more for the future.

Phalon - Bulgaria and Turkey can be risky, but when you look at the prices compared with places like France or America, its easy to see why its worth it. in Turkey you can get a 3 bet 'villa' for about £20,000. In Florida that would cost you £150,000!

[TheShadowMan]

There is that program on the beeb about holiday homes, watch a few episodes of that :-)

I personally think its a bad investment, here is why.

One.if you only use it as a holiday home, how are you going to pay for it the other 9mths of the year. You could rent it out, but as you say going for a country with low property prices, its usually relative the annual income. Thus the rental income you get will not be alot

Two. What happens if you get burgaled. Do you drop everything and fly over. You will have to get a managemnt company to look after a property. usually they take a 12.5% -15% cust of rental income or cash payment to do so.

Three. If you buy a house in touristy place, and use during that time you will have no way/ very little way of making any rent during the off season.

Four. Property Taxing may vary in that chosen country. Some countries take up 45% of sale price as tax, plus stamp duty equivilant.

Five. Rent Tax. When you earn income for housing you have to pay tax on it the same way you get taxed on your current income. This is ofcourse only when you declare it as income. There are way around this aswell. eg you live in the house that you rent. But you are using this as a holiday home this wont be the case.

All the above are just IMHO. But do check it out before buying.

tsm

[Proteus]

It's hard to comment if I don't know where you live, but, if you want to make money, here (in the UK) buying normal houses/apartments in this country and renting them out for people to live in makes you more money than buying holiday homes and renting them out to people on holiday (plus the capital appreciation is much better here than in most other countries).

Also, if you want a holiday home, take into account travelling to and from it, as you may own it but you don't get free flights there. Loads of people in the UK who have bought houses in Florida end up paying a fortune because they forgot that flying to the US several times a year is rather expensive.

[CrashTester]

Originally Posted by TheShadowMan

There is that program on the beeb about holiday homes, watch a few episodes of that :-)

I personally think its a bad investment, here is why.

One.if you only use it as a holiday home, how are you going to pay for it the other 9mths of the year. You could rent it out, but as you say going for a country with low property prices, its usually relative the annual income. Thus the rental income you get will not be alot

Two. What happens if you get burgaled. Do you drop everything and fly over. You will have to get a managemnt company to look after a property. usually they take a 12.5% -15% cust of rental income or cash payment to do so.

Three. If you buy a house in touristy place, and use during that time you will have no way/ very little way of making any rent during the off season.

Four. Property Taxing may vary in that chosen country. Some countries take up 45% of sale price as tax, plus stamp duty equivilant.

Five. Rent Tax. When you earn income for housing you have to pay tax on it the same way you get taxed on your current income. This is ofcourse only when you declare it as income. There are way around this aswell. eg you live in the house that you rent. But you are using this as a holiday home this wont be the case.

All the above are just IMHO. But do check it out before buying.

tsm

1. It would definately have to keep itself financially, I cant buy it outright. Since I would hope that the target renters are from the UK, rental prices would be higher to reflect this.

2. I would be using the services of a management company, which would of course dip into any profits and would have to be factored into th eoverall cost.

3. Its primary purpose would be to pay for itself, so this will undoubtadly mean not using it during peak seasons. I am OK with this.

4. Tax would have to be looked into in depth when I eventually choose a place to buy. I cant see me buying anywhere that charges 45% tax though!

5. Agai, the tax would have to be factored into the overall cost but some country have tax agreements meaning you wont pay twice on the earnings. This would have to be considered.

Thanks

[Marilyn Manson]

Property in Baghdad is quite cheap, or so I hear, and the market there can only improve.

[CrashTester]

Originally Posted by Proteus

It's hard to comment if I don't know where you live, but, if you want to make money, here (in the UK) buying normal houses/apartments in this country and renting them out for people to live in makes you more money than buying holiday homes and renting them out to people on holiday (plus the capital appreciation is much better here than in most other countries).

Also, if you want a holiday home, take into account travelling to and from it, as you may own it but you don't get free flights there. Loads of people in the UK who have bought houses in Florida end up paying a fortune because they forgot that flying to the US several times a year is rather expensive.

I am also in the UK.

I dont necesarily agree that buying/renting over here is more profitable. You see, house prices are so expensive now that once you pay the 20% usually needed to get a buy to let mortgage, the cost of an 80% mortgage doesnt pay much more than the rental price. Factor into this any management fees, insurances and maintenace costs and you are not looking at much profit.

Also, house prices are nearing their peak and it would be very risky to buy and rely in house prices rising.

Thats what I think anyway.

[CrashTester]

Originally Posted by Marilyn Manson

Property in Baghdad is quite cheap, or so I hear, and the market there can only improve.

Yes, but if I really wanted to buy into a sh1te hole, I'd buy in Tipton.

[Marilyn Manson]

Originally Posted by CrashTester

Yes, but if I really wanted to buy into a sh1te hole, I'd buy in Tipton.

Buying low and selling high is how teh money is made. In thirty years, people may actually start chosing to live in Baghdad again, and then you can make a killing.

[1-X]

Originally Posted by CrashTester

Yes, but if I really wanted to buy into a sh1te hole, I'd buy in Tipton.

I'd like to know what made you choose Tipton for your example? (possibly the notoriety of the "Tipton Taliban?")

[JammyJim]

Florida isnt expensive btw. but it does depend on where you buy.
the current dollar rate is exceptionally good and you will get rather ace 'bang for your buck'
HOWEVAR

theres little money to be made and dont believe a word about 'guarnteed rental income'. its usually for a year and paid for out of the commission a realtor will 'get' as part of the deal.

if you do settle on florida buy on the coast. property along the gulf is going up like nobodys business but its quite expensive if your looking at a community already 'setup'

tbh my money would go into eastern european countries about to join the EU.

[Dante Hicks]

You need to be careful about buying property in countries with unfamiliar legal systems. What if your managing agents go bust in Bulgaria? What if you get squatters? What if the place is damaged by tenants? Do you have any idea of what processes to go through?

[I am Idler]

Ibiza, I suggest you go buy a house with Dovey

[demiGOD]

Originally Posted by CrashTester

I've been looking for a while and initially settled for Florida, what with it being a big tourist place and all, but Florida is expensive and already an established market so Im worried that there wont be much room for capital appreciation.

my brother florida cost of living is one of the cheapest in the US - you want maximum property appreciation? buy one in my beautiful hometown los angeles, california - properties appreciate every year at 5-20% and in some very rare cases, 25-35% a year - the beauty of earthquakes, forest fires, and southern california blondes is all property insurance costs and cost of living go up every year, if your only aim is to collect profit from owning a property, then southern california and the bay area, california are your best bets