Key Post: Excellent article on investing in overseas property

Re: >>Excellent article on investing in overseas prope

Interesting nugget from [broken link removed]

Whether the high levels of capital appreciation sought by investors in these areas [EU Accession countries] will materialise is debatable - the likelihood is that it will happen in some areas, but not in most. Emerging re-gions are only for the investor taking a speculative punt - it is not advisable to borrow money in the hope that rentals will cover repayments, this is a recipe for disaster in regions where future economic health is very much in the balance.
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Cyprus Property

Interesting comments on the Cyprus market above.

I can confirm that the healthy appreciation of both land and property (predicted) has actually happpened already. I have lived in the Paphos area for the past five years and property has increased by about 30% in the past twelve months alone
The foreigner investment market and indeed the holiday market is heavily dominated by the Brittish and the property market most definitely moves in tandem with the UK market.

However there are signs that the Buy to let market here is becoming saturated. More and more rentals are appearing on the classifieds and the yields are diminishing quickly.

Also this is a market where you need to know what you are doing. All that glitters is not gold. The building industry is not very well regulated and there is little protection for the foreign investor that makes a "mistake"
A fair share of cowboy developers exist and the build quality is often terribly basic / bad.

Title deeds in this country is a subject to be studied at length. Sometimes they are never issued and very often
the land remains registered in the developers name even after the sale has closed. It is not a safe system as we know it in Ireland.

If you decide to invest make sure you research well and visit thhe Cyprus property boards for guidance.
 
Re: Cyprus Property

Aphrodite

Can you name a couple of reputable developers in Cyprus? I would like to look into investing/holidaying there.

Slim 8)
 
Re: >>Excellent article on investing in overseas property

Some interesting (positive) case studies on overseas property investing in [broken link removed] in today's Business Post, along with some notes of caution in [broken link removed].[If links don't work, search the SBPost archive by date for 'Ireland's foreign legion' on 22th May 05].

Some more SBPost articles from 29th May;

[broken link removed]
[broken link removed]
 
Re: >>Excellent article on investing in overseas property

brendan
One little issue ;In the example Diarmain gives 4th columne 3rd last paragraph he shows a tax of 42% on top of the 20% capital gains .You don't pay income tax on a capital gain when bringing it back into the country.
Tom


 
Re: >>Excellent article on investing in overseas property

i am watching a program on bbc 1 as i type this. they are doing a program on hong kong. a developer is showing the presenter around apartments in a development known as bel air. the apartments are 2,400 sq ft and have 4 beds. the price is $3-4 million us dollars and heres the good bit. so far he has sold over 1,000 of them with a turnover of over 1.7 billion us dollars. makes dear old dublin look expensive. just moved on to shanghai now.
 
Re: >>Excellent article on investing in overseas property

The article relates to some difficulties associated with Spain, in particular so it hardly qualifies as an article on "problems with overseas property".
 
Re: >>Excellent article on investing in overseas property

Mr Magoo

Before Rainyday gets into trouble for a sarcastic answer, is Spain not overseas? It is a really excellent article about the perils of investing in Spain, which is an important subset of investing overseas.

Brendan
 
Re: >>Excellent article on investing in overseas property

With all due respect to Blendon Communications, is not this:
Stallholders were promised it would be "Europe's biggest showcase of it's kind", there would be "hard-hitting advertising campaigns incorporating national and local press advertising, radio, direct mail and public relations", and there would be "23,000 visitors with a passion and avid interest in all things Spanish".
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...just another example of the kind of bs hype that has surrounded the Spanish property market for many decades?

I bought a beachfront 1/2-acre plot in Cadiz province in 2002 and today - on the local market - it's probably worth at least 200/300% of the purchase price. When the planning permission comes through, I cheerfully assume it'll double again in value. But I'll then build on it and hold onto it for at least 10 years from the initial purchase date... (at which point the punitive 'Wealth Tax' on non-residents is no longer applicable. And in any case, I intend leaving this to my kids. Rental yields aren't really a consideration, as I view this as a buy-and-hold/early retirement option).

I don't want to compare apples and oranges, but - in this as in so many things - a little bit of advance 'scouting'/careful reflection based on independent research goes a long, long way... Right now, I certainly wouldn't buy into any current developments on the Costa del Sol or the Costa Blanca. But that's just because - at a gut level - I prefer the Costa de la Luz...:)
 
Re: >>Excellent article on investing in overseas property

The article refers to the certain disadvantages to investing in Spain relative to other overseas' countries. To label the aticle as one that highlights the risks of investing "overseas" is misleading.

RD's sarcasm would trouble me none.
 
Re: >>Excellent article on investing in overseas property

Surely what is happening in Spain could happen anywhere overseas?
 
Re: >>Excellent article on investing in overseas property

Another potentially relevant Sunday Business Post article: [broken link removed].
 
Re: >>Excellent article on investing in overseas property

Spain :
CGT does however have a large part to play if you sell within 5 years.

I thought the holding of a property for 5 or 10 years no longer saved a portion of CGT and the old thing that affected it was the fact that you were rebuying property in Spain or taking the proceeds out of the country.

Prices have dropped 5-10% on the Costa Blanca with some apt blocks standing 1/2 empty witn apts for sale . 4 years ago the apts would have been sold off plans. My apt has doubled in price (very conservative estimate based on recent sales, it should be up 150% if the fall back had not occurred), I bought on edge of large town (not in the huge urbanisations ) and the Spaniards are buying both for living in and for holiday homes. I don't rent but I know some who do and they can be both lucky and unlucky, and I would not like to depend on renting to pay a mortgage.
Ongoing costs are 1200-1500 per annum and many forget this constant drip which is not insignificant. taxes, local taxes, water, electricity, community charges and fin rep fees.
Don't know if I would actually buy at today's prices, resales are much better value but they have other worries.

If its for an "investment" then all investment options should be considered.
 
Re: >>Excellent article on investing in overseas property

For what it is worth we have a villa with private pool in costa del sol and it rents well (30 weeks plus) each year. My advice would be to spend the few quid extra and go for villa with pool rather than appt with communal pool etc.
Also you MUST have an agent on site that you TRUST. Have heard stories of gardeners subletting villas etc unbeknown to the owner!! I feel you need someone there as well as agent to keep an eye on things to make sure that villa is not being let unbeknown to you. As a tip get to know some locals or expats and they will be glad to do this for you. I hope I do not sound paranoid but you have to realise that certain less ethical agents find the temptation of a vacant villa to rent too much and may forget to tell you of new clients etc.
Yes ongoing costs are significant...but there are still good investments to be had.
Buying off plans there is like tossing a coin..........Buy in an area where there is no potential for further development that could block views etc etc.
And as for buying in hotels in Dublin without going out to see them or going on a short brainwash trip to view them .........forget it! A local agent told me that these trips are designed to sell the north facing properties to the unknowing paddys! South facing is critical.
Go to local letting agents and ask their advice.........they are much more impartial than the estate agent!.........Dont rush..........go there a few times and get to know your area intimately.
Sorry for preaching but the Irish have the reputation as the easy sells in Spain........so something like this has to be said.........
 
Re: >>Excellent article on investing in overseas property

Hi Swingbridge


I have just invested in property in Cyprus - while reading your piece it made me feel like it was the correct thing to do!
What you say is true - i have been to Cyprus and its really nice. IN Cyprus you can only get 65% mortgage - interest rate is higher but that will change which they join the EU. On the double taxation agreement - this only applies for income and not for capital appreciation so you will still have to pay tax on appreciation in both countries - however these laws can change with entry to the EU. Is your purchase for investment or holiday home? If it is for investment - make sure you have a do up all the figures to ensure your rent will cover mortgage and an extra bit if possible for any time lags in the rental period. I think with mine that it will only break even. In hindsight i would have picked a better investment which would give me more positive cashflow. I still have not got my mortgage in Cyprus yet to have put in alot of cash myself for the deposit - however its not the worst investment.

Best of luck whatever you decide!
 
Re: >>Excellent article on investing in overseas property

Didn't Cyprus join the EU in May 2004 or are you referring to the northern part?
 
Re: >>Excellent article on investing in overseas property

While i myself believe Spain etc is speculation i urge people to look up the word speculation versus investment in the dictionary:

[broken link removed]
[font=arial,sans-serif]spec·u·la·tion[/font]
a. Contemplation or consideration of a subject; meditation. b. A conclusion, opinion, or theory reached by conjecture. c. Reasoning based on inconclusive evidence; conjecture or supposition.
a. Engagement in risky business transactions on the chance of quick or considerable profit. b. A commercial or financial transaction involving speculation.

in·vest·ment
The act of investing.
An amount invested.
Property or another possession acquired for future financial return or benefit. A commitment, as of time or support.
A military siege.

Obviously this means that investment is where one acquires a cash positive asset something that generates excess monies to its cost. Whereas speculation may not necessarily generate excess monies to its cost.

AKA return.

In my book :
speculation != return on initial cash outlay
investment == return on initial cash outlay
 
Re: >>Excellent article on investing in overseas property

I'm new to this (so may not be replying correctly) but does anybody know anything about buying off-plans abroad, by paying say a 30% deposit, and then selling on before the property is built (ie selling on the contract within a year or so of initial deposit, but before completion of building work)? I have bought in Bulgaria, paid 30% deposit, with the intention of selling on the "contract". The property will be completed in winter 2007 and I intend to sell on a year before that (or more). Has anybody done this before? How has it worked out?
 
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