Mortgage for investment property

C

Cormac T

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13
Hi there,

Does anyone know of a mortgage provide/broker who could provide a buy to let mortgage to applicants without a primary home bought already? I am keen to invest in a foreign property but would prefer to get a mortgage from a provider in Ireland. Any tips/suggestions much appreciated.

Thanks,
Cormac
 
Do you have any assets with equity in them which could be remortaged Farm etc some may lend you money if you have a decent amount saved with them or earn quite a good steady income . But a lot of the banks are tightening up especially on risky foreign investments. Have a word with a few brokers but to be honest if you can remortage something here a lot of banks wont want to touch financing something abroad over which they may not have a clear cut claim
 
Hi Cormac,

There are many reasons why you should buy a property to live in before investing abroad, such as loss of FTB rate of mortgage interest relief, lower FTB stamp duty rates, etc.

Do you have any specific city in mind?

Budapest
 
Hello,

I am aware that I will lose my FTB's stamp duty relief etc but to be honest, I am a good bit priced out of the Irish market. I am thinking of buying either in Warsaw or Riga which seem to be good places for rental income and capital appreciation.

As for any assets, I have savings of around 30 000 eur which I plan to use for the investment and to cover stamp duty and any other taxes. So I guess my only option seems to be to get a mortgage from a foreign bank. I will check around a few brokers just to be sure. Maybe I could use my parent's house/business as collateral-though I would prefer not to go this route.
 
Cormac T said:
Maybe I could use my parent's house/business as collateral-though I would prefer not to go this route.
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Maybe you should tell them first and see what they say!

If you're thinking about Riga, well you're probably priced out of that market too. Riga ain't cheap by any standards, but is a lovely city. If you're looking at for an expensive bauble to show off then it's ideal.

Warsaw is very industrial.

I'll leave it at that.
 
hi

i dont wanna come across as being a detractor or a nay sayer but if your just starting off maybe you would maybe take a less "risky" bet then emerging eastern europe not to say that great potential is not possible in poland or riga nor is it easy to get into the irish market at all and i do feel
for young investors trying to get a foothold in an inflated market.
all im saying is be careful with your savings i dont know how long it took you to get your 30k but you might consider partnering on a property with your parents maybe in the uk or a holiday home in a good solid location like south of france its stable will hold its value and good chance of appreciation. Another possibility is buying of plans youve got your 30 already maybe look at something ready 2007 to 2009 where u dont have to outlay very much and then when its built hopefully youll have your appreciation. Obviously location location etc applies here too
 
Hi Cormac,

This website may be useful:


Interest rates in most parts of Eastern Europe are in the region of 6-10%, so if you can get a mortgage in Ireland to finance your overseas investment, this is preferable, whether by re-mortgaging your parents' home or by other means.

As cyp12 suggested, as its your first investment, have you also looked at properties closer to home such as Cavan/Sligo, etc. I'm not recommending these in particular but there are surely some places that you can afford in Ireland with 30,000 saved. Being within a two hour drive of your investment property can be very beneficial. You would also have a much better chance of getting an Irish buy to let mortgage with such an investment.

Budapest
 
Hi there,

Thanks for all your comments so far-much appreciated. I know since I am just starting out that I should be extremely careful with what I do with my savings. So I will Cyp12, look into off-plans and consider any other viable options.

With regards a Polish mortgage, I just found some info on Polish Mortages with Bank Zachodni WBK (BZWBK), a major Polish bank owned by Allied Irish Bank. There are different interest rates depending on which currency you get your mortgage in eg 4.45% eur; 5.05% zloty; 6.25% GBP-could someone clarify why there is such a difference?? Plus they charge 2% for arranging the mortgage!! Seems abit ridiculous to me-isn't it the interest due more than enough payment for arranging the mortgage?

Thanks
Cormac
 
Hi Cormac,

As far as I know there is a 1-2.5% sanctioning fee to arrange a Polish mortgage for a foreigner. I don't know the market properly though so am not sure. Maybe somebody who has invested there can help.

I agree that Warsaw is not a pretty city but 'industrial' can be a good thing for rental prospects at the higher end of the market.

Budapest
 
budapest said:
I agree that Warsaw is not a pretty city but 'industrial' can be a good thing for rental prospects at the higher end of the market.
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I would imagine that a first time investor would have to be very lucky to find themselves renting out at the higher end of the market. Limited funds and insufficient local knowledge/language usually mean scrimping on the wrong things: location, fittings, good management company.
 
Hi Howitzer,

The higher end of the market is where most investors operate in Eastern Europe. In my experience, the typical investor will have around 80-100k to spend and will buy a centrally-located apartment to rent out to international students and professionals, companies and (optimistically!) embassies. There is little point investing in property for the local market as wages are too low and there is not a tradition of renting here.

Budapest
 
Hi,

Regarding the Polish property, I have max 100k to invest which would get me a 1-2 bedroom apartment not too far from the city centre. Though there are much more expensive properties right beside the embassies (their equivalent to Ballsbridge). I would be aiming to rent to ex-pats. The estate agents said this shouldn't be a problem; however I need to do some independent reseach on this.
 
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