Overseas Property Dream has become a Nightmare for Many

Perplexed said:

As to the previous poster the difference with property investment is that you cannot get mortgages to invest in bonds or funds.

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Unless you want to invest a couple of hundred million in Anglo !

bullworth said:

Germans rent their homes mostly while having a few hundred thousand in managed funds or bonds etc. They dont need to own property as a status symbol. A poor property purchase can be compared to someone who buys a fancy car on hire purchase just to show off. They have the bling but underneath theres less substance to their finances than appearances suggest. Plenty of people would buy in Berlin for personal use and enjoy that interesting city but we can give the example of Spain also. Apartments in Spain have (in my experience from talking with people who have them) given very poor rent and once a local in the Costa Del Sol rents its difficult to get them out. Renting an apartment for personal use in the Costa Del Sol for a few weeks per year at cheap rent rates and investing your cash elsewhere even in a high interest bank account would be a far better, more productive and safer use of money than paying for the thing whole year around. If youre buying for personal use anywhere then you cant really rent with much satisfaction so people buying property for the sake of it thinking theyre on the pigs back when really theyre making a poor investment without actually thinking it through rationally is the problem.

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It's because the Germans like to rent and pay on time etc along with the fact that rental yields been high makes Germany an attractive proposition to Investors. This goes for commercial property there also. It's a stable country and economy. I am not sure why you are talking about personal usage your initial point expressed the thought that people were buying in Berlin to visit the place. This is not the reality. German property investment is just that and it's the yields and the stabilty thats attractive. Spain is a different pickle. I am not sure what 'high' interest accounts your referring to (pray tell) but it's each to their own. If your risk adverse stick to bank accounts. Cant see you making much money on it.. you cant borrow to invest in accounts whereas with property you can put 10% down, borrow the rest and in a good investment have the yield 'wash it's face' buying the property for you.

Perplexed said:

The moon!! I just didn't buy at inflated "Paddy"prices. Yes, I did purchase within the last 6yrs but purely for long term investment and in areas where the rental is long term as opposed to seasonal ie. I expected a realistic return as opposed to pie in the sky rents & capital appreciation. Some countries did not have the same boom as we have so the downturns are not as savage as Ireland.

The old fundamental of investing in property was that the rental income would repay the mortgage as opposed to expecting capital appreciation of 20%pa. I went by these principles and I am not dissapointed.

As to the previous poster the difference with property investment is that you cannot get mortgages to invest in bonds or funds.

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Fundamentals of 'good' property investment existed here as much as any where. The maths are the same. Once we got into a bubble the yields were too low for any good investment. Those who still bought expecting endless increasing values were amateurs or idiots. There were parts of the US that had respectable yields but the price still collasped. Any place that had price appreciation is having a big dip now. So where did you buy then??

Budapest & Berlin both in good central areas.

I bought to live in Berlin. Sitting in my apartment now. Bought in 2007, apparently the prices have gone UP!

Rents are definitely on the up in most of Berlin, anywhere within the Ring anyway. Even talking to locals who would have never considered buying, are considering buying! I believe the Germans are turning (for better or worse) towards home ownership tbh.

Murphaph can you give any links to back this?? Do you have any knowledge of commercial property market there?

Sorry Ceatharlach, wouldn't be looking at commercial property here at all so can't comment.

My girlfriend's father's rent was jacked up by €46 a month last week, it was about 250 a month for him previously and he lives way out in the east in a tower block. It's all anecdotal stuff like that I'm afraid, no concrete links I can provide you.

People go on about the 200k empty flats in Berlin but in reality anything half decent within the Ringbahn will find a tenant. A huge amount of those empty flats would be in the former east in tower blocks where 20% of the flats could be empty, and sometimes whole buildings, some of which are uninhabitable, but because the germans don't fudge any figures, they are included in the empty accommodation heading! My building is always fully occupied, guy just moved into the only empty flat in the building yesterday.

It's important to buy somewhere with good transport links like anywhere else, and although Berlin generally has excellent transport infrastructure, there are spots here and there with only buses which would turn people off a lot of the time.

I am generally quite optimistic for Berlin. I intend to stay here anyway, though we'll probably move out of the city proper and into a house in a commuter town in Brandenburg in a couple of years for the extra space-I miss tinkering with motorbikes!

I have one in Budapest and one in Spain. From what I can see there are two types of overseas property buyer: investor and holiday home buyer. There are also two types of property: city property and resort property.

A resort (such as Bulgaria, some parts of Spain, Northern Morocco etc) is generally not an investment and from my experience makes absolutely no sense as an investment unless maybe you have a spectacular location in a very well connected, established area (unlike me). But most places just don't have the demand from tenants or buyers for re-sale. You should only really buy in a tourist area if you love the place and can see yourself going there every year for a holiday.

In a capital city like Bratislava, Budapest, Berlin or other in a country with a decent legal system it can make more sense. At least there will be some demand, and there might be a long term future. Only problem is now is that prices have been hit. But at least the property should rent.