Wednesday, January 10, 2018

Millennials & Mortgages: Is Buying Abroad The Right Thing To Do?

When it comes to getting on the property ladder, millennials are realising that the ability to
buy a home locally is getting too hard. The property prices are skyrocketing, but the
salaries are stagnating; it doesn’t feel very fair, does it? Buying a home in the same
town you’ve always lived in may feel impossible, and buying abroad increasingly
becomes a more attractive option.
Buying in Barcelona or mooching the homes in swanky Monaco with Icon Property often
feels like a prospect that is more enticing than pitching up at the local real estate agency
and booking viewings. Overseas property often looks far more affordable compared to
a more saturated housing market at home. The prospects of sunshine, overseas
tenants and an investment to rely on in the future sounds far brighter than buying
at home. Buying a second home for retirement purposes or simply for your own
enjoyment now may look like a great idea, but you have to balance the pros and
cons before you do it.
The pros are many and they are varied and having a holiday home abroad is a real
option for many people. Having a holiday home to use all year around is a very
attractive reason to go abroad, not to mention the fact that the initial purchase can
be cheaper than buying at home. You can also choose to let the property for a far
higher amount than you could at home, making it a fantastic income option if you
choose to let it for a little more than you pay on the mortgage. It can be a fantastic
investment in a location that you enjoy, and you’ll one day be able to sell that home
at a profit to fund your future should you choose not to retire there.
Having two mortgages; one abroad and one at home, means that you are the owner
of two very significant debts. This can be terrifying to manage and the rental income
that you charge may not cover the mortgage payment, especially if you don’t get the
tenants. The maintenance costs are solely your responsibility and the burden there
could be very difficult to straddle. Another con for buying abroad is the fact that the
cost and the return of your investment relies on the exchange rate and the fluctuations
there. The cost you also have to consider is that of a management company to run
the property for you, and this can be difficult to manage because of a language
barrier and simply the lack of trust in a new company.

Investing in property abroad isn’t as easy as buying at home. While buying a home
is a minefield no matter where you are, it’s often easier to buy at home as you already
know the language, the currency and the process. Don’t be afraid to do enough
research and speak to different advisors so that you fully understand what you are
undertaking before you do it. You may be a millennial stuck in a property trap, but you
don’t have to be!

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