Reply With QuoteWhere do you want to live when you're retired / old? What is property prices here increase significantly more over time than where you have bought?
Let me explain.
I've always had a dream / ambition of owning a property in the sun. However like most people I've been in the house / mortgage / kids hamster wheel since I left education. I'm now approaching 49 so it's time to re-evaluate what I want from the rest of my life.
I've always believed that you should own a property rather than renting so you can see a return on your payments over the years. We're in the position now where there's around Ł100k equity in our house so I've been thinking....what if I sell the house, buy a property abroad cash and rent here? Yes I'll be paying someone else's mortgage here but I'd still own a property and therefore still have that investment that's increasing in value. However the benefit is that the property abroad would be providing us and our family with enjoyment for years rather than simply being equity sitting doing nothing.
I could also rent it out so it's earning me money.
I'd love to hear your thoughts and experiences.
Cheers.
Where do you want to live when you're retired / old? What is property prices here increase significantly more over time than where you have bought?
Worked with someone who’d bought and sold one in Spain. Her advice was rent a place for a year and sun let when not in use by you, that way you can see the area and work out how much use you’re going to get out of it. Maybe worth considering before buying, particularly as it’s not clear when you’d be able to use it anyway.
Just keep in mind that depending on where your property in the Sun is, you might be wating a long time for the sort've appreciation you're used to in the UK. Plus renting out property at least here in Spain can be nightmare, the law is much more on the side of the tenants, can be very hard to get a bad/ non paying tenant out, I've a Spansh friend who experienced this...You could go the AIR B N B route for holiday lets but then who's on the ground managing it, organising cleaning, key drop off/ collection, condition checks, dealing with any problems or maintenance issues...Not wishing to put you off, just caveat emptor.
Based on friends who own property abroad, my thoughts would be consider how you travel to the property and possible ownership/tax rules. If you fly to the property, what happens if the carrier pulls the route. Also if you fly, you might want a car at the destination which means insurance, tax, maintenance etc.
Whilst the tax implications of ownership abroad are known now, things can change.
Buying a property abroad isn't the problem as there's thousands of people trying to sell: the problems come when you try & sell it.
If you move out of the UK housing market you'll find it very difficult to get back in.
Sounds like you’d be spreading yourself pretty thin but the fact you are soliciting opinion on this, on your career etc then perhaps you do really need some sort of change.
Didn't I just read that you're looking to buy a new house here?
I’ve bought, lived and sold in Spain and have been back in the UK for the last thirteen years.
I also own a large apartment in Bulgaria yet have never actually been to the country.
My advice would be to stay put in the UK and have holidays in as many different places as you want. It will be far cheaper in the long run to own where you live and rent where you holiday than vice versa!
Given my time again, I would not have bought either of the foreign properties and merely rented for the time we were living in Spain. I’d be at least half a million quid better off if I had done.
You read that we're considering moving house here, yes. Our options are move in the UK, stay where we are and do some improvements or think seriously about purchasing a holiday home and renting.
- - - Updated - - -Originally Posted by cbh
Wow, that's both helpful and very honest. Thanks.
How long do you have left on your current mortgage? If it's less than half the term stick with what you have as you'll be paying a lot more capital as opposed to interest in the 2nd half of the term and your equity will grow even faster. You'll have done the hard part already!
Yes I have less than half left and have done the hard yards.
Your equity in your UK home isn't sitting there doing nothing, as pointed out, it's growing year on year. Your current home gives you stability which will never be matched in the private rental sector (I have known quite a few people who needed to move when the landlord wanted to realise his asset). You sound like you are in a mid life crisis trying to get a clear picture of a desirable life ahead - foolhardy to make the choice considered in this OP whilst you are still unsure. Might be best to rank your options for change in priority order and deal with one at a time maybe? At the moment I fear you are juggling too many ideas mate. Btw if I have read correctly, I think Ł100K equity may be insufficient to purchase the property you would be happy with in the area you would be happy with?
Thanks, I agree that I'm in a kind of mid-life crisis position hence lots of ideas and options flying around. My statement about the equity doing nothing could be re-worded to doing nothing for me but is building a nice inheritance for the kids. We're only here for a visit and at almost 50 I'd like to enjoy the rest of my visit to the max.
Last edited by TaketheCannoli; 5th March 2021 at 17:48.
This, I personally know a fair few Brits who have only managed to get out from under only by taking 20, 30, gulp 40 percent hits on what they paid. Years it's taken some of them to shift these properties on.
Unless the stars align and you can find the right buy at the right price, which takes time and effort to really get to know an area, it's a mine field...It can be done, we managed to buy a ruin do it up and make a modestly profitable onward sale when it came time to move onto something bigger and better, but it was back in the mid 90's when we bought. Now the Spaniards are asking silly money even for the falling down stuff, and often you have to do a ton of work just getting all the siblings to agree a price/ agree to sell it. Everything else there is a developers premium.
With respect a 100k isn't enough even in my area Murcia, one of the cheaper regions, to get you a nice 2/3 bedroom coastal property/ house, and that'd be the only area/ property type/ LOCATION crucially, worth even attempting to do what you're considering imho OP.
Last edited by Passenger; 5th March 2021 at 17:59.
Settle your job position first and if necessary then take 12 month breather to asses the new job or become accepting with your current employment choice.Once your mind is settled on that front you might realise all your other concerns disappear.
Pause and breathe. Good advice. Oh and buy an MX-5
Ive bought 2 properties (1 now sold) in Cyprus and financed both purchases using the equity in my house.
Obviously this meant that my mortgage in the UK went up but interest rates were low and I got a good fixed deal.
Now years later I’m in the fortunate position of having my UK property with no mortgage and the holiday home in Cyprus to go to when I’m allowed.
One thing I did research thoroughly was the overheads I would incur with the Cyprus property (rates, standing charge for electric, insurance costs etc) before taking the plunge.
Both properties were bought off plan so that meant bathrooms, kitchens, floor tiles etc could be to me and the boss’s taste.
Hope this is of some use
I've thought about it but decided not too.
I'm going to keep my properties here and rent at least one of them out to pay rent for a place overseas.
Feels more secure for some reason and also lets me travel more....
Cheers,
Adam.
We’ve got two in France. I’m very pleased that Mrs T-7 speaks fluent French & is able to sort out any issues. The French seem to like bureaucracy in triplicate, appartment buildings have management charges & the management decisions are inevitably taken by the French residents. We had to pay our share of an electric fence to keep the Sangliers out because they dig up the lawn. The Sangliers just trot up the path instead, the same way as the humans do. The legal matters are nigh on impossible to get your head round, even if you speak French. I’m not sure I’d recommend it.
Things to avoid.
1. Growing a ponytail
2. Homebrew cider
3. Salsa lessons
Re: your question, I would be cautious due to currency risk and market risk.
I know a fair few people who have done it and found it to become a millstone in the long run, such as when life changes have meant that they needed to sell up or changes in the local laws have caused issues. Personally I couldn't envisage repeatedly going back to the same place, it's a big old world to explore.
Don't just do something, sit there. - TNH
Totally agree, I just couldn't do this.
Have you got your sums right that you only own Ł100k of your house? It appears very low to me
I’ve often thought about this. Personally I would keep my house here and rent abroad. It would give me flexibility to move and any repairs and maintenance is someone else’s problem.
My in-laws are Cypriot and have a house here and in the Cyprus. Whenever they’re over here they worry about the house in Cyprus and when they’re in Cyprus they worry about the house here. As you can guess they worry a lot!
Also, remember that while EU countries are next door-is neighbours, the situation has changed on 1 st Jan on matter like healthcare and length of stay for example.If you're in a position to do so, finish off your mortgage here, and consider going further south as and when you need some sun (winter is nicer in Morocco or in the Azores for example, or even Cabo Verde)
'Against stupidity, the gods themselves struggle in vain' - Schiller.
David, as you know I’ve divided my time between Britain and Malta for the past 20 years or so. For me it’s a combination of personal factors (I’m Maltese and British) and my working life and movements are complementary.
If you can make it work I can’t imagine a better way to live. I could also imagine extreme frustration if I was tied to school holidays and an employment contract with a finite leave allowance. On the other hand if you make that move to the private sector and you have a role that allows you to be based remotely it could work out very nicely indeed.
I know this is stating the obvious but the “rest of the world “ is a big place and your decision about where you buy will have a number of factors including local laws, travel costs and times, and above all where would you actually choose to have a home.
I know that you’ve been to Malta and if you think you might want to check out our little Rock as a possible option I’ll be very happy to show you some of the non-tourist areas and introduce a couple of estate agents I think are reliable.
My house is worth around Ł100k more than I owe on it so yes, I believe my sums are correct.
Hi Adrian - Malta would be my first choice destination however my budget wouldn’t stretch to my preferred Three Cities location ;)
Last edited by TaketheCannoli; 5th March 2021 at 20:08.
We've been out a couple of times, Morocco, once to look at the possibility of property to over winter somewhere sunnier than Spain, yes mad/ self indulgent I know, it was a bit too sketchy, wild west imho. That said for a week or two's holiday, especially if you love tagine, pack plenty of immodium/ have an iron gut, you'll be OK.
We thought about buying in Austria or southern Germany about 10 years back and in some ways wish we had, but each summer we rent a beautiful 2 bed 2 bath apartment in a place near Kitzbuhel for about 1100 euros for 4 weeks
We’ll be looking to do 3 months a year there from this year on, and zero worries and cost of ownership is better for us...
Ł100k seems very low to me too, by 49 I’d expect Ł300k+. I don’t see really see Ł100k going very far. Plus, as you admit earlier, you don’t seem to know what you want at the moment. So, I’d hold tight.
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Why would you “expect” someone to have a certain amount of equity by a certain age? That equation simply doesn’t exist. My extended four bed semi isn’t worth Ł300k.
Last edited by TaketheCannoli; 5th March 2021 at 20:13.
I would suggest talking to a FA. Ł100k equity at nearly 50 is quite low in my opinion and I don't really see how you could even begin to look into this idea. If it was that you had a spare Ł100k in savings then it would be different.
Personally I would keep the the property at home and if need be do a let abroad.
I've been looking at a 6 month let in Canary Islands for the winter and its not that bad.
I would tend to to take foreign holidays in multiple countries till you find one (country) that feels like a second home. Then maybe rent there for an extended period before committing to buy. You can have a lot of holidays for Ł100K.
As I replied above, an equation of age = equity value simply doesn’t exist.
But if he burns through part or all of that 100k what will he use to eventually buy a place some where that feels like home...
Good advice I thinks been offered, well meant, speak to a financial planner, get a big picture assessment of financial health and wealth.
Last edited by Passenger; 5th March 2021 at 20:41.
This is about right as I have been there and done it as well and I have just finally managed to sell the second property and escape the whole painful episode.
The problem is all the admin, taxes, maintenance etc as which ends up being a mill stone around your neck. In additional when you have time you always feel that you should go there even when you want to try somewhere new.
In summary, don’t do it !!
Often thought about doing the same but then I ask myself if I really want to holiday in the same place every time... My parents had a holiday home (though in the UK) - every time they went they were doing housework, DIY, decorating and gardening, so not exactly a holiday.
Rather than own there and rent here, switch it around and own here, rent wherever and whenever you like abroad (i.e. go on holiday and truly relax)
Just my tuppence and all the best
Ł100k is not sufficient to risk getting out of the UK (owner) property market and then be in the world of variables (exchange rates, property ups/down, bureaucracy etc.).
If you were thinking of doing it with 100% of a decent equity from your property and just spending Ł100k of it then that is a very different situation.
Last edited by Chris_in_the_UK; 5th March 2021 at 20:54.
When you look long into an abyss, the abyss looks long into you.........
Agree, folks making these comments are failing to recognise the disparity in property prices between the north and south. Lots of decent 3 bed semis around my area for Ł170K, lots of folks have no more than Ł100k equity in their houses. depending on your point of view its an upside or downside of living in an area where property is relatively cheap.
I bought a 3 bed detached bungalow with a spacious 90ft garden for a tad over Ł250k, its a different world compared to the south/home counties.
As for your idea to buy overseas, it's crazy, don`t do it. Overseas property has always been risky and given the current economic climate its even more risky.
Agreed Paul and I certainly see our house prices as a positive. We have a fairly large, extended four bed semi in a quiet street. The area is great and the schools are fantastic. We have the coast and national parks on our doorstep too. As an example, this is as close to the size and spec of mine currently on the market near me:
https://renownestates.com/search/pro...ode=REN1004480
And a nice three bed semi that went on the market on Wednesday and sold the next day:
https://renownestates.com/search/pro...ode=REN1004915
Last edited by TaketheCannoli; 5th March 2021 at 21:28.
Too many people on here assume watch enthusiasts are all earning Brewster's?
They do indeed.
My take on home abroad.
First of all do your research, do you want a summer or winter get away?
All year round decent weather is the ideal.
We have a family apartment in Los Cristianos Tenerife, top floor (lift) with sea views from the balcony, mountain views to the left. Overlooks one of the two pools & catches the sun till early evening, especially good in winter. Main airport nearby & one of the world’s greatest water parks on the door step.
Fantastic weather all year round, very reasonable eating out & incredible choice. We have one of the best Italian & Steak restaurants close by.
Buy in the right location & you will not look back, our has an underground garage & these are really in demand.
Look at it another way with a likely recession in the U.K. and likely EU if not globally with associated property slump would you consider selling up now, banking the cash and moving into a rental?
If not given you’ll be more fluid and potentially able to rejoin the market with greater equity or possibly even zero mortgage, why would you do that but tie up funds in foreign property?
I estimate we have flown back and forth to Cyprus 70 times since our original purchase in 2003. People ask if we get sick of going to the same place all the time and the answer is an empathetic no.
For us there is something about the familiarity that is both reassuring and relaxing.
In almost 20 years of foreign property ownership we have never considered not having the bolt hole abroad and all being well never will.
Just my opinion....
There’s been some odd comments OP, rather judgemental that you need to ignore. Why someone would expect a certain amount of equity at a given age is narrow minded, some people rent all their lives and have zero equity.
That Segway’s into my point, my Dad looked into oversea’s property and ruled it out due to
- Being on holiday on holiday (i.e. not doing maintenance, sorting bills, making beds, cooking even)
- Travel costs (often package holidays mean flight costs are subsidised)
- Any associated language / local property law barriers
As a secondary thought given the house value in your area how about seeing if you could free up some equity in your current property via remortgage and buy a rental house? There not making the money they use to and you have to be very careful re tenants but particularly if you are a lower rate tax payer (or your wife is) you should be able to make enough to fund one holiday abroad per year without the hassle of ownership.
The bigger advantage is you have two appreciating assets.
Just a thought. Good luck OP
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