Just managed to remove a weight around my neck, sell an overseas property

irish_bob

im sure the majority of people will have little sympathy for me and they would be right but i thought id share the news with the room

i managed to sell an appartment in budapest in this past week , i bought it in 2005 and had a tennant for about two years but none in the previous twelve months , i lost tens of thousands on the joint but am relieved to have gotten out

overseas property was one of the biggest scams ever pulled on the irish people but dont get me wrong , im not saying i was a victim , i was a fool and im glad i got out without having to take too much pain

athtrasna

Mike the OP said the property was in Budapest so it's Hungary

AARRRGH

Well done Irish Bob, must be such a relief to be free of it, even if it means you have a bit of extra debt now.

Climate Expert

AARRRGH wrote: »

Well done Irish Bob, must be such a relief to be free of it, even if it means you have a bit of extra debt now.

Well done for what? Losing tens of thousands?

If thats the case in a fairly strong city like Budapest can you imagine the losses the rest of the Irish goons have in places like Bulgaria.

ntlbell

ah but think of all the great portfolio conversations they can have at dinner parties?

every cloud n all that

AARRRGH

Climate Expert wrote: »

Well done for what?

Well done for managing to cut your loss and walk away.

jetski

Curious did an irish person buy it? Well done anyhow.

irish_bob

jetski wrote: »

Curious did an irish person buy it? Well done anyhow.

i wasnt expecting congratulations , you people are too kind , as i said i was a fool to buy in the 1st place ,

it was an australian who is married to a hungarian who bought it

as for the comment about budapest being a strong city , while it might be better than bulgaria, hungary is a complete and utter dive , the people are without the doubt the most cynical and miserable ive ever met , they rally around one goal, to fleece every foreigner for everything he,s got , from taxi drivers to restaraunts to any of the proffesions , the place is going nowhere and is a basket case economically , budapest itself from an archetectual point of view is pretty but the whole place has a very ugly vibe

Climate Expert

irish_bob wrote: »

i wasnt expecting congratulations , you people are too kind , as i said i was a fool to buy in the 1st place ,

it was an australian who is married to a hungarian who bought it

as for the comment about budapest being a strong city , while it might be better than bulgaria, hungary is a complete and utter dive , the people are without the doubt the most cynical and miserable ive ever met , they rally around one goal, to fleece every foreigner for everything he,s got , from taxi drivers to restaraunts to any of the proffesions , the place is going nowhere and is a basket case economically , budapest itself from an archetectual point of view is pretty but the whole place has a very ugly vibe

I'd be far from a fan of Budapest but I think your experience has really been tainted by your property woes.

How did you lose the money? Was it a city centre apt?

irish_bob

Climate Expert wrote: »

I'd be far from a fan of Budapest but I think your experience has really been tainted by your property woes.

How did you lose the money? Was it a city centre apt?

the property was in district 7 , i lost money for a few reasons , i bought at the end of 2005 which was more or less the peak , the property boom in budapest was purely a spin off of the property boom in the uk and ireland , thier was absolutly no home grown factors contributing to it so when out bubble burst , so did theirs , i dont believe any irish person made money on eastern european property since 2003 , sure they were the pro,s who bought at the start of the decade but those were the days before the phenomenon of overseas property exhibitions became a staple of many middle class familys sunday outing , were talking circa 2003 to 2007 here

lastly , i paid too much for the property , like most irish people , i was ripped off by irish estate agents but at the end of the day , no one forced me to buy it and as ive said twice already , i was a big fool to buy

oh and my opinions of hungarians are not soley formed by my experience with property there , in fact my view is quite widespread and common regarding the place and people

Sir Rantsalot

Well done on getting out irish bob. I guess you'll just have to suck up the losses and move on without that weight around your neck, as you describe it.
I bought a house here in Ireland at the very height of the bubble but managed to sell it after a year, and the feeling of relief is enormous!

irish_bob

Sir Rantsalot wrote: »

Well done on getting out irish bob. I guess you'll just have to suck up the losses and move on without that weight around your neck, as you describe it.
I bought a house here in Ireland at the very height of the bubble but managed to sell it after a year, and the feeling of relief is enormous!

did you loose money on the property

kippy

irish_bob wrote: »

did you loose money on the property

Tens of thousands apparently.

irish_bob wrote: »

i lost tens of thousands on the joint but am relieved to have gotten out

Ah well, you're probably one of many Irish people in the same position, no one died so all good.

Sir Rantsalot

irish_bob wrote: »

did you loose money on the property

I think that was directed at me
Bought in December 05 for €315k and sold in December 06 for €345k. But, to be honest, between buying expenses (solicitor, survey etc), moving in expenses, a bit of redecoration, selling costs (solicitor, estate agent fees), and moving costs again, not to mention losing my first time buyers' status, and all the mortgage interest I paid to the bank, I reckon I just about broke even .
And after all that, I still count myself lucky.
I was just one of those lovely gullible 1st time buyers the EAs love to see coming through the door. Never again though!

EKRIUQ

irish_bob wrote: »

as for the comment about budapest being a strong city , while it might be better than bulgaria, hungary is a complete and utter dive , the people are without the doubt the most cynical and miserable ive ever met , they rally around one goal, to fleece every foreigner for everything he,s got , from taxi drivers to restaurants to any of the professions , the place is going nowhere and is a basket case economically , budapest itself from an architectural point of view is pretty but the whole place has a very ugly vibe

A person close to me bought 2 properties in Budapest in good locations in 2005,luckily these were bought cheaply but needed work done which brought their price up. they managed to sell one this year and barely broke even but decided to keep the second. I've been to Budapest a couple of times and have to agree that the natives hold the foreigners with contempt, I was out with a Hungarian for an meal and he even had to cause an argument because the serving staff were so ignorant and rude. At least we got the Hungarian priced menu not the foreigner priced menu.

irish_bob

EKRIUQ wrote: »

A person close to me bought 2 properties in Budapest in good locations in 2005,luckily these were bought cheaply but needed work done which brought their price up. they managed to sell one this year and barely broke even but decided to keep the second. I've been to Budapest a couple of times and have to agree that the natives hold the foreigners with contempt, I was out with a Hungarian for an meal and he even had to cause an argument because the serving staff were so ignorant and rude. At least we got the Hungarian priced menu not the foreigner priced menu.

fine dining in budapest is going to mc donalds or burger king , thier the only places you can be sure of decent food

Firetrap

There was a guy called Auto320 who used to post on AskAboutMoney.com. Sadly, he died a year to 18 months ago. He posted a lot of stuff about the stupidity of buying property in the likes of Hungary and Bulgaria.

Here's an interesting post he made in reply to someone who was thinking of buying in Bulgaria and asked would he be able to sell it again.

Will you be able to sell it again? No, unless at a substantial discount on what you paid. If you keep it a year or so until the inevitable crash, you are looking at at losing around half your money.

Biggest mistake of your life? Hard to say, have you followed the crowd before into similar sirtuations? Did you buy loads of Eircom shares maybe, or did you fall for "women empowering women"? Do you send money to Nigerian scammers? It will certainly be up there with some of your worst mistakes for sure.

Can I again spell out the whole Bulgarian thing for anyone thinking of putting their hard-earned cash into this nonsense?

Firstly, all the coastal and ski property is being offered at a multiple of the local market value. I have seen such extremes as apartments valued locally at 40k being sold to Irish buyers at three times that amount.

Secondly, the prices include some of the highest commissions in the industry, up to 15% in some cases. In other words, even if the property was worth the asking price, you have an immediate setback of 15% if you were to sell it on on the same day you bought it.

Thirdly, most of this stuff is pushed on people with the promise of a guaranteed rental, usually of 5% for 2 years. No such rental market exists. If it did, given the 10 week season, the returns would have to be in excess of 25% per annum pro rata. Not in the real world! The "guaranteed rental" is created by adding the cost on to the price; this was done in the past in some other places, including Hungary in a limited way, but has been brought to an art form in Bulgaria -- because it works! Greed will sucker in the amateur buyer every time, regardless of the advice that I or others give; there are people reading this who will still be suckered by a fast talking salesman in Bulgaria, but if it helps one person...

The "guaranteed rent" will usually be paid ok; you will be given back your 5% p.a for 2 years, your own money back but minues a handling fee, and you will be liable for income tax on it -- some "investment"! At the end of the 2 year period you will suddenly be wondering why the rent has dried up. This won't be too bad if you didn't also swallow the line peddled by many salesmen, that "the rent will pay the mortgage". A surprising number of Irish buyers have fallen for this line, and from PMs to me I am shocked at how many otherwise sane people have taken this advice from salesmen chasing these huge commissions, and have bought multiple units on borrowed money.

The big problem in Bulgaria is what happens when the big glut of "guaranteed rental" dries up. The bulk of projects sold in the recent past have yet to be completed or are only now being completed, so the effect of this implosion will not be felt for a couple of years. Anyone who is stuck in this mess now should get out with as much as they can. Throwing good money after bad, i.e. completing on a property where only a small deposit of 5 or 10k has been paid, is probably not a good idea.

(Original post here)

Emerald Lass

Good solid advice from Auto320. My family have a property business abroad (not Bulgaria or Hungary). When we priced our properties we value them at the local market rate, and we don't up the price for foreigners. We charged both locals and outside investors the same price. we did not add on the 10-15% other 'estate agents' did. We did not fund a project on the strength of using 'off plan' deposits to fund the building (and have no bonding policy in place and no safety net of cash). And they all laughed at us - you'll never make money, you are missing the big money blah blah. We were the fools according to them.

Speed forward 5 years - almost all of the rip off merchants are bust, owing banks hundreds of thousands and leaving half finished projects. all our projects have been finished on time and budget. We have had a steady business in the local market as well as from overseas buyers. Yes things have fallen off compared to the past, but the business is still holding steady and making money. So to all those who laughed at us, we are having the last laugh. We may not have made the amount of money other agents made (the easy money as they called it) but we made a fair commission for the work we did - in the long run we are still standing and they are hiding from the bank manager and disgruntled customers.

One good outcome of this slump is that hopefully it will run the thieves and robbers out of the business and then those of us who did things the right way and struggled through will be able to do business without having to compete with dishonest competitors.

irish_bob

Emerald Lass wrote: »

Good solid advice from Auto320. My family have a property business abroad (not Bulgaria or Hungary). When we priced our properties we value them at the local market rate, and we don't up the price for foreigners. We charged both locals and outside investors the same price. we did not add on the 10-15% other 'estate agents' did. We did not fund a project on the strength of using 'off plan' deposits to fund the building (and have no bonding policy in place and no safety net of cash). And they all laughed at us - you'll never make money, you are missing the big money blah blah. We were the fools according to them.

Speed forward 5 years - almost all of the rip off merchants are bust, owing banks hundreds of thousands and leaving half finished projects. all our projects have been finished on time and budget. We have had a steady business in the local market as well as from overseas buyers. Yes things have fallen off compared to the past, but the business is still holding steady and making money. So to all those who laughed at us, we are having the last laugh. We may not have made the amount of money other agents made (the easy money as they called it) but we made a fair commission for the work we did - in the long run we are still standing and they are hiding from the bank manager and disgruntled customers.

One good outcome of this slump is that hopefully it will run the thieves and robbers out of the business and then those of us who did things the right way and struggled through will be able to do business without having to compete with dishonest competitors.

hungary is a country going nowhere fast , even those who bought at market local price in the past 4 years will have seen thier assetts reduced in value , i have lost tens of thousands , i didnt buy into a guarenteed rental scheme , i genuinly had tennants for two full years and got paid 800 euro a month cash ( ok , the managment company made up added costs but in hungary where corruption is rampant , you have to put up with this) but at the end of the day i still lost out big on the value of the property , as i said in earlier posts , the only people who made a cent or will make a cent on hungarian property are those pros who got in at the start of the decade , this rules out 99% of those who bought since it became the latest thing to do , we are talking circa 2003 onwards , those people never made a rex, its a question of who lost the least in terms of doing ok out of it , to break even would be to hit the jackpot in terms of eastern european property

Emerald Lass

I was just giving my input and agreeing with the sound advice forwarded from another site - have no experience of the Hungarian market so I can't comment on that. but in other regions a big part of the problem has been inflated prices aimed at the overseas investor. Prices a local would never pay.

irish_bob

Emerald Lass wrote: »

I was just giving my input and agreeing with the sound advice forwarded from another site - have no experience of the Hungarian market so I can't comment on that. but in other regions a big part of the problem has been inflated prices aimed at the overseas investor. Prices a local would never pay.

and did the irish estate agents who sold theese properties to other irish people mention that the locals would never be able to buy theese properties back off them , no

Emerald Lass

no they didn't, nor did some of the local estate agents. However we charged local market rate, and as a result people were not ripped off. As a result some of them have sold on their properties, many to the local market, and still made a few quid.

Sorry, maybe I'm being defensive but that post came across as if you were implying I was one of said Irish agents who misled customers. I can tell you we certainly did not - and we are not based primarily in Ireland, we just have Irish agents, who are paid a standard 3% commission - the standard commission in the local market, not 15% on top of the 10% that the local agent charged. Customer paid a total of 3%, no more.

irish_bob

Emerald Lass wrote: »

no they didn't, nor did some of the local estate agents. However we charged local market rate, and as a result people were not ripped off. As a result some of them have sold on their properties, many to the local market, and still made a few quid.

Sorry, maybe I'm being defensive but that post came across as if you were implying I was one of said Irish agents who misled customers. I can tell you we certainly did not - and we are not based primarily in Ireland, we just have Irish agents, who are paid a standard 3% commission - the standard commission in the local market, not 15% on top of the 10% that the local agent charged. Customer paid a total of 3%, no more.

when it comes to eastern european property , all predictions of potential growth were exagerated beyond belief , unfortunatly too many people believed the hype , you dont have to defend your honour to me , im sure you put a gun to no ones head , no one certainly put a gun to mine

Emerald Lass

fair enough, and I agree - I think a lot of people got caught up in the hype, and were so desperate to fulfill the whole 'retirement property abroad' that they bought into a dream many could not really afford, and many did not understand the local markets. I think there was a lot of 'getting caught up in the hype' and keeping up with the Joneses.

My only defense of ourselves is that, yes we did not hold a gun to anyones head, but then again we did not mislead anyone either. But we are not involved in Eastern Europe, so I believe that makes a difference - the area we are involved in has remained more stable than others, with property prices not crashing as dramatically in other places. The only people who feel their properties have 'devalued' are those who paid over the odds in the first place. For those who paid local values, then things are more optimistic.