Home Equity Loans : A Guide to Buying Overseas Property

scammed as opposed to signing with a relatively unproven or unknown company. It also meant that the process went as smooth as possible because as with anything that relies on different groups of people especially when a foreign language is involved problems will inevitably be and were encountered along the way. You will be thankful as I was when you are represented by people who can deal with these problems professionally and efficiently. The price of the apartment itself was €173,000 or $204,000 if you hail from the U.S. and £115,000 for anyone of British origin. I am not 100% sure if the legislation is the same everywhere but I had to get an equity loan from another property as financial institutions don't provide mortgages for foreign property where I'm living (Ireland). There was the option to take a Chinese loan but since it required a 40% deposit I decided against it. It is important to remember as well that a rule of thumb when buying property is that whatever the price is you can add about 10% further onto it to cover legal and administration fees. That is pretty much how it worked out in this case with the final figure working out around €193,000. It is important to study the currency exchange rate stability before deciding what type of finance to take as it can have a big effect on repayments. With the equity loan the only up front payment I had to make was a €10,000 deposit. I often find that paying over a large lump sum at the start is a good idea even if not required as it not only reduces repayments but it helps you to assess if you can afford the property by how difficult it was to get that sort of money together and also gives you a sense of assurance in the case that something should go wrong. The particular development I choose has one important feature in that there is a guaranteed rental agreement on it for five years. Guaranteed rental agreements are now becoming increasingly common and are something that I would highly recommend looking for when choosing a property. Ensure, however that they are backed against some other asset and ask the company you are dealing with for the net amount you will receive and how often you will receive it as there can often be a lot of blowing smoke and conjecture by companies in giving details in this area. The apartment I choose a had 6% gross yield (i.e. 6% of the property price) after tax and management fees dropping to about 5% will is quite a good rate. The management set-up is quite an important aspect of the purchase. It is a good idea to get quotes (if possible) of typical management fees in the area to gauge the value for money you are getting. A guaranteed rental is a good way of buying a number of investments as a good rental scheme of say around 5% should pay off the majority of a 20 year mortgage allowing you to purchase a number of other investments from the equity of your original investment. In this way a relatively small investment can quickly grow to become a major investment within a few years. This is just a general overview on buying overseas property as an investment. If you would like detailed information on any aspect of the article feel free to contact me. My details can be found on my website.



About the author:

Dave Costello is the founder of www.internationaljobsolutions.com which recently came online. He has a bachelor's degree in Economics and is current member of a small but highly successful property investment group.
Written By: Dave Costello