property abroad

[pomsta]

l would like to.... as an investment , buy a property somewhere warm(probably canaries) for personal use and to rent, l can`t really afford it as l stand now , but l am thinking about getting a mortgage and purchasing, would the rental charges cover the mortgage over 12months

[parkesquay]

You need to look at more than just the mortgage side of things. I lived in Spain for more than 6 years and did have residential status. If you are not a 'resident' you will probably be subject to a non-residential tax on the property on the assumption that you 'let' your property out and thus have unearned income from it. There will also be other costs such as community and management fees to consider.
As regards whether any rental you get will cover the cost of your mortgage I suppose this depends on what you intend to ask for rent.
Also, this will still be 'unearned income' and is subject to UK Tax Laws also.

[EverClean]

Looking at the mortgage side of things, a lender will not count rental income as your personal income. You must have a provable income to get a foreign mortgage - there are generally no such things as buy-to-let or self-certification mortgages outside the UK. 35% of your income must cover all your credit commitments - ie UK mortgage, any loans or HP agreements, monthly payments on any credit cards and the new overseas mortgage.

[pomsta]

very helpful... thanx folks

[ali_alic]

Hi there. Tried to post this friday but it wouldn't allow me for some reason. Anyway, I have just bought a place in Florida as an investment and throughout all the paperwork and talks etc it has always been stressed that rental cannot be guaranteed. It will also depend on what sort of prop you buy (condo, villa, townhouse etc), how you intend to market it and the location. We went on an inspection trip to make sure we were happy with all 3. We have a management co in place who will market and maintain the property for us as well as be on site to hand over keys etc. They do this for a percentage of the rental income, which encourages them to get the place rented out as much as possible, otherwise they don't get paid!! However, although we are only 4 miles away from Disney and located just off international drive, they reckon we should only rely on an average of 32-35 weeks rental a year. On this we should make a slight profit, but again we bought this for investment so profit is a secondary thing. Also bear in mind that as a foreign national you may be required to put down 20% deposit and the mortgage rates abroad can be higher than here. We used a British broker for our mortgage and got one for 5.09% whereas the Americans wanted over 7%. Good luck

[pomsta]

thanks ali... thats fantastic advice.. maybe florida`s the place NOT the canaries