Buy to let - live abroad

thedirtydevil

Hi all,

Looking for some advice. Anyways I currently live in the UK and have been for last 5 years (and will probably for a few more before moving home and settling down). Anyways im looking at buying a house in my home village and would rent it out. Anyone done this before. I never bought before and have about a 35% deposit -from asking prices for few properties. Another concern is my money is mainly in uk bank although have an irish bank account too so would just transfer across? Thankfully have a decent salary so not concerned if struggle to rent it as could cover mortgage anyways just about.

Anyone done this before? What are the key pitfalls with mortgage when living and working abroad. Is it easy to get mortgage for this? Any extra taxes etc? My parents live locally and are retired so they would assist in 'minding' the house etc. Not sure where I would start as none of my siblings have purchased a house yet or my close friends. any help welcome!

djimi

Where is your home village? Have you checked out what the rental market is like there?

Do you intend on living in this house when you return home? If not, then my advise would be keep your money and continue saving, and use it when you get home to purchase your own house.

thedirtydevil

Thanks for reply. Village is in cork,about ten miles west of city. Rental market is fairly bouyant. By dropping a bit below the average rental cost would be confident I would fill it. Either way it's not end of the world if i dont.

Yes the plan would be to return in a few years and live in it until its paid off and use the value to upscale.

My main concern is how easy to get 1st time buyer investment mortgage when living and working abroad.

Mrs OBumble

I haven't done it ... by you may find it easier to get the mortgage from a bank in the UK.

Also, be really clear about what you may be asking your parents to do: worst case, they could need to evict a bunch of scummers ... or (worse for some people) a family with gorgeous wee blonde children whose parents just refuse to pay the rent. Property management ain't for the faint-hearted.

The Glass Key

What would the OP's tax liability be?

murphaph

The Glass Key wrote: »

What would the OP's tax liability be?

Impossible to say without knowing more.

thedirtydevil

Mrs OBumble wrote: »

I haven't done it ... by you may find it easier to get the mortgage from a bank in the UK.

Also, be really clear about what you may be asking your parents to do: worst case, they could need to evict a bunch of scummers ... or (worse for some people) a family with gorgeous wee blonde children whose parents just refuse to pay the rent. Property management ain't for the faint-hearted.

Thanks yes i understand it will be a bit of work and not necessarily straightforward for my parents. I am usually home every 4 weeks too so would work around this.

Not sure i would get a mortgage in UK to purchase property in ireland but will check it out.

Thanks

sunnysoutheast

thedirtydevil wrote: »

Not sure i would get a mortgage in UK to purchase property in ireland but will check it out.

Not sure there's too many who would entertain this in the current climate without you having a decently long record of paying a mortgage in the UK.

Given the pitfalls of renting in Ireland why not look at buying a place in the UK?

Pawwed Rig

Mrs OBumble wrote: »

I haven't done it ... by you may find it easier to get the mortgage from a bank in the UK.

With respect that is a really bad idea as you will be receiving euro rental income but making payments in sterling. You would be leaving yourself open to all sorts of foreign exchange risk that you do not need.

Also sterling is weak against the euro at the moment. Were sterling to strengthen it could be a case that the rental income buys less and less sterling every month on which to pay down the loan.
This risk would be made worse when the OP eventually returns to Ireland.

Since 2008 the euro to sterling rate has varied between .77 and .97. This will make huge differences in the payments the OP would need to make never mind the interest rate risk in a country that is not tied to the ECB and the probability of further falls in the value of the house.

I am normally up for a risky investment but this would be madness (in my humble opinion)

Mrs OBumble

Pawwed Rig wrote: »

With respect that is a really bad idea as you will be receiving euro rental income but making payments in sterling. You would be leaving yourself open to all sorts of foreign exchange risk that you do not need.

I'm very well aware of exchange rates and the way the fluctuate.

I'm also aware of this statement from the original post: "so not concerned if struggle to rent it as could cover mortgage anyways just about"

Clearly some of the money going onto the mortgage will be earned in sterling anyways.

And dealing with a bank in the same country that you are working in could be a little easier than one in a country where you have no employment history for years.

I guess it all comes down to what the bank are looking for.

roro2

Unlikely that a UK bank would lend against an Irish property, but not a good idea to take on a foreign currency mortgage in my opinion anyway. OP may also find it difficult to get a mortgage from an Irish bank when they are non-resident with few financial ties.

More importantly though - it doesn't sound like the wisest decision strictly from an investment point of view. Being "not concerned" if you're unable to rent does not auger well and there are surely better property investments than your home village. If it's main purpose is as a future home then that's a different story, but you're also into the territory of speculating on future property prices then.

enda1

I'd say the best would be to talk with a mortgage broker in Ireland. The most you can get in terms of LTV is 70% as a non-resident investor.

Good luck.