Do we sell foreign property at a loss?

S

Sheridan

Guest
We bought a villa on the Silver coast 3 years ago. It cost €220,00, but we also put a lot of money into it so more like €250,000. This was meant to be a long term investment but due to a substantial fall in income (both of us are public servants) we are feeling the pinch.

We have 2 mortgages one for family home and one for Portugal property.
The family home is on a tracker and costs €670 per month (87k outstanding)
The Portugese is variable and costs €863 per month (142 K outstanding), also have monthly bills for water and electricity approx €110-130/mth
We are getting rental but does not cover the costs associated with the villa.

We have an offer on the Portugese property of €175,000, with fees etc we will end up with about 165K.

My heart tells me to take it, pay off the mortgage and put some of the remaining money away for kids education (we have 4) and at least on a monthly basis we will have at least €1000 extra at our disposal and not feel so strapped.

I am posting here really for independant advice, are we mad to consider this offer and lose so much or we do we just take the money and run?
 
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Ireland, Florida, Spain,Bulgaria and on and on - thousands of Irish and other investors have lost far more money.
I'm one off them and until a few months ago I could not let go of a very large expensive house in Florida.
As my wife said - "are you expecting it to suddenly shoot up in price before you die ,or after? Life's short . Get what you can and pay off some of your other debts, instead of cost-cutting and moaning about how we can't afford this or that "

It's tough Sheridan. I reluctantly put mine on the market last month but I know I'll have to keep slashing the price until it sells.
If you have got a firm offer you're lucky compared to many who can't shift their overseas -or Irish - holiday homes.

Unless some clever poster can see a big turnaround in the Portugese property market in the next few years then get out now.
 
Take the money and run. And never look back at what if property prices rise or how much you've lost. Now is what is relevant.

Just to add, you've not had a loss, you're one of the lucky ones. Anyone able to get out of Portugal with no loss is a winner.
 
Do we sell foreign property?

is money in your pocket now worth more to you than potentially receiving a higher amount in x number of years?

had a similar situation with a house here myself a while back, lost a lot of money overall but was lucky to be able to walk away with a few quid which I could use on my new house. Sometimes I think "what if I had held onto it" but glad I sold and have now moved on.
 
I'm in a similar situation to yourself - we bought 7 years ago and bought the apartment for our own personal use not to rent out but to hold on to for longterm but with wage cuts we are finding it tough going. I put it for sale in October last year, have had a few offers but the lastest offer is E8000 off the asking price which we are accepting - I am down 35% from what we paid originally - our property is in spain and to be honest I don't hold out much optimisim for the property market in Spain for the foreseeable future - I think I am lucky to be getting out with being down 35%. My advice is to sell and get out and have a quality of life here. No point in having a place abroad and scrimping and scraping here - I for one am looking forward to renting someoneelse's property - no headache of maintaining - I will miss it no doubt and have enjoyed the experience also but there are also negatives to having a second property. I follow a lot of different forums about spain and if I am to believe the "experts" it ain't looking good and prices could fall as much as they have in Ireland.

Best of luck in your decision.

Angela59
 
Thanks for the advice. I think we will probably sell up. There is no point killing ourselves here. It will ease the pressure we feel every month at the moment. Its the end of a dream.. Could have been a lot worse.
 
I think you're wise to sell, you need to forget about what has been spent already as "dead money" and focus on how to sort your future finances the best you can.

Really you are in a fortunate situation compared to many who have negative equity, squatter tenants, high maintenance charges and poor title to the property.
 
oldnick said:
Ireland, Florida, Spain,Bulgaria and on and on - thousands of Irish and other investors have lost far more money.
I'm one off them and until a few months ago I could not let go of a very large expensive house in Florida.
As my wife said - "are you expecting it to suddenly shoot up in price before you die ,or after? Life's short . Get what you can and pay off some of your other debts, instead of cost-cutting and moaning about how we can't afford this or that "

It's tough Sheridan. I reluctantly put mine on the market last month but I know I'll have to keep slashing the price until it sells.
If you have got a firm offer you're lucky compared to many who can't shift their overseas -or Irish - holiday homes.

Unless some clever poster can see a big turnaround in the Portugese property market in the next few years then get out now.
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Hi Old Nick.
It's a while since we spoke but I'm surprised that after holding on to your property all this time that you've put it up for sale just as the Florida market is beginning to move upwards at last.

Inventory everywhere in the state is coming down and most economic indicators point to the States emerging from the lean spell - the Fed appears to have cancelled all plans for more QE.

Hold your nerve ,old buddy
 
Wahaay -your post makes me feel slightly better. Yes, I see Florida ,and indeed most USA property inventory is down as ,thank goodness, are the number of foreclosures. I've set a price that's unattainable at present and will,indeed, hold my nerve until it gets that price.
And - if the Euro does collapse I suppose it's good to have a dollar asset


Talking about collapses - did you push the Greek idea any further?
 
oldnick said:
Wahaay -your post makes me feel slightly better. Yes, I see Florida ,and indeed most USA property inventory is down as ,thank goodness, are the number of foreclosures. I've set a price that's unattainable at present and will,indeed, hold my nerve until it gets that price.
And - if the Euro does collapse I suppose it's good to have a dollar asset


Talking about collapses - did you push the Greek idea any further?
Click to expand...


No, I got lucky in Florida. A property that I've been nibbling at for several years suddenly became available and I closed two months ago for 60% down on the purchase price of 5 years ago and with a tenant in situ paying an excellent rent.

Greece is still on my horizon - a trip out there early summer will give me an idea whether prices are still vastly inflated which I suspect they will be.
I've a hunch there'll also be quite a lot of German-owned property up for sale after an upcoming unfriendly summer.
 
oldnick said:
Wahaay -your post makes me feel slightly better. Yes, I see Florida ,and indeed most USA property inventory is down as ,thank goodness, are the number of foreclosures. I've set a price that's unattainable at present and will,indeed, hold my nerve until it gets that price.
And - if the Euro does collapse I suppose it's good to have a dollar asset


Talking about collapses - did you push the Greek idea any further?
Click to expand...

Any nibbles yet on your property sale - I'd be interested to hear of what's happening.
 
Bronte said:
Just to add, you've not had a loss, you're one of the lucky ones. Anyone able to get out of Portugal with no loss is a winner.
Click to expand...

Cost €250k. Sell €175k. = Loss.

There is a very good programme on Channell 4, mornings, every alternate week called "A Place in the Sun" Winter Sun. The programme although a repeat is based on year 2012.

The presenter Johnnie has spent the winter in the USA, Florida. Every second programme is about Florida. He is showing that house prices are continuing to fall with large 4 bedroom houses in good locations, with pool selling for about £120k. Well worth checking out.
 
Wahaay. just seen your post. I tend to look at computer increasingly less as my wife says it's turning me into a sad lonely old man.

Yes, there have been nibbles and the EA is a bit buggd that I'm refusing offers.

Am not sure what Grizzly is talking about regarding Florida properties continuing to fall because the figures show an increase in all sectors of the Florida property market.

I bought my place for $400k in 2005 -inc all furniture and fees.
Compared to most properties in Florida,(especially Orlando where my subdivision-estate- Windsor Hills is located) mine has not fallen too much..

Am getting offers around $350k but, being greedy, I resent paying 6% commission and other fees which means that an offer of 350k leaves ca. $320k in my hands.

As I'm getting $15k p.a. nett rent -after every last cost, fee and tax, I'm in no hurry,especially as I've got a guaranteed rental income agreement which involves not a second of my time.
Other owners of similar propErties (6bedroomed)are netting twice that amount but marketing their properties themselves on the internet and this involves a lot of time and effort.

Yes -one can buy 4 bedroomed houses for about $170k but on good subvisions (estates)like Windsor Hills they'd cost ca $300K. Just like anywhere the location, quality, reputation, securty ,facilities, etc all play a role in sales and rental prices.

It's always worth looking at realtor.com .Not only do they detail every property in USA for sale, they also show every recent sale with actual sales price -something soon ,but not presently, possible in ireland.
 
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oldnick said:
Wahaay. just seen your post. I tend to look at computer increasingly less as my wife says it's turning me into a sad lonely old man.

Yes, there have been nibbles and the EA is a bit buggd that I'm refusing offers.

Am not sure what Grizzly is talking about regarding Florida properties continuing to fall because the figures show an increase in all sectors of the Florida property market.

I bought my place for $400k in 2005 -inc all furniture and fees.
Compared to most properties in Florida,(especially Orlando where my subdivision-estate- Windsor Hills is located) mine has not fallen too much..

Am getting offers around $350k but, being greedy, I resent paying 6% commission and other fees which means that an offer of 350k leaves ca. $320k in my hands.

As I'm getting $15k p.a. nett rent -after every last cost, fee and tax, I'm in no hurry,especially as I've got a guaranteed rental income agreement which involves not a second of my time.
Other owners of similar propErties (6bedroomed)are netting twice that amount but marketing their properties themselves on the internet and this involves a lot of time and effort.

Yes -one can buy 4 bedroomed houses for about $170k but on good subvisions (estates)like Windsor Hills they'd cost ca $300K. Just like anywhere the location, quality, reputation, securty ,facilities, etc all play a role in sales and rental prices.

It's always worth looking at realtor.com .Not only do they detail every property in USA for sale, they also show every recent sale with actual sales price -something soon ,but not presently, possible in ireland.
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Yup, I think you're doing exactly the right thing by sitting tight and not selling.
The Florida property market has re-bounded from the bottom with prices and rental values rising.
Low construction activity, a decline in foreclosed-property sales, a falling overall supply and stronger overall demand for real estate is driving property values up again.
Sure, there's still plenty of rubbish around at the bottom end of the market but property, like yours, in good areas is doing well.
The old location x 3 adage is the same now as it has always been.
 
oldnick said:
As I'm getting $15k p.a. nett rent -after every last cost, fee and tax, I'm in no hurry,especially as I've got a guaranteed rental income agreement which involves not a second of my time.
.
Click to expand...

How does that work Oldnick? Are you guaranteed the 15K no matter what?
 
Bronte said:
How does that work Oldnick? Are you guaranteed the 15K no matter what?
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I presume what Oldnick means is that he rents his property out for 12 months a year to a single renter thus guaranteeing him regular mon thly income.

Whereas he could market the property himself to short-term holiday lets which, whilst it might bring him more income also involves a lot more effort.

I'm in a similar situation - I have a tenant in situ who I'm happy to leave there for years until I'm ready to make more use of the property.

Then I might rent it out for 2-3 months to snowbirds to cover HOA fees + tax freeing it up for the rest of the year for myself.

There is considerable demand,particularly from Canadians and people living in the Northern United States where winters are harsh for short-term winter lets in Florida.

That's the great thing about Florida and how it has ridden out the property crash - people will always want the sun.
 
Yes, Bronte, Wahaay is basically right, though my single renter is actually a holiday company that sells- though its brochure -to the public.

Most of my fellow owners on the estate like to do their own bookings and indeed do make good money. I've had a life-time of booking holidays and just don't want to deal with holidaymakers anymore !
 
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