Scandanavia
- Thread starter F. Kruger
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San Martino
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I'm not sure why - it may be because there does seem to be limited information available on the internet and I have found it difficult to locate proactive estate agents. In addition, only Finland is in the eurozone, while Norway isn't even in the EU. Language may also be an issue.
I am interested in Scandinavia as a whole (I have invested in Finland), as I believe that there are still reasonable returns to be had in this area. Scandinavia seems to me to be a far safer bet than Eastern Europe - you won't get massive returns (profit appears to be from yield rather than capital appreciation), but I believe you can buy assets that are realistically priced, rather than assets that seem to be priced on an 'ability to bear' basis.
I am interested in Scandinavia as a whole (I have invested in Finland), as I believe that there are still reasonable returns to be had in this area. Scandinavia seems to me to be a far safer bet than Eastern Europe - you won't get massive returns (profit appears to be from yield rather than capital appreciation), but I believe you can buy assets that are realistically priced, rather than assets that seem to be priced on an 'ability to bear' basis.
gnf_ireland
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Hi, I lived in Stockholm for 14 months ending last december and here are my general perceptions of the property market there.
First of all you have massive rent control (which is avoidable if you rent to a company for example). The government controls a 'reasonable' amount of the property and you put your name on the list and when its your turn you get a very cheap rental property for life. I think this is what a reasonable number of swedes do - or at least the ones I worked with done. I think maybe 5-10% actually owned where they lived.
Most of the rental properties appear to be second-hand rentals.
One thing you will notice is the lack of cranes on the skyline - especially if you have come from Dublin.
And knowing Sweden - who knows what the taxation situation would be regarding rental income. This may change though with the new government in place.
For more information on rentals etc - look at http://www.bostaddirekt.com/
Finally - the Swedish Kronor has dropped about 10% against the euro in the 14 months I was there - no idea what it is at now though !
First of all you have massive rent control (which is avoidable if you rent to a company for example). The government controls a 'reasonable' amount of the property and you put your name on the list and when its your turn you get a very cheap rental property for life. I think this is what a reasonable number of swedes do - or at least the ones I worked with done. I think maybe 5-10% actually owned where they lived.
Most of the rental properties appear to be second-hand rentals.
One thing you will notice is the lack of cranes on the skyline - especially if you have come from Dublin.
And knowing Sweden - who knows what the taxation situation would be regarding rental income. This may change though with the new government in place.
For more information on rentals etc - look at http://www.bostaddirekt.com/
Finally - the Swedish Kronor has dropped about 10% against the euro in the 14 months I was there - no idea what it is at now though !
In addition to this, even the people who own where they live do not quite 'own' it if it's an apartment. They own the exclusive rights to live in it, but they can only let it according to the house rules, which are typically designed to allow someone to move out for up to 2 years.
There is simply no BTL market.
Slightly off topic but interesting - somewhat due to this strict control of property, sales happen incredibly quickly. Typically one open viewing followed by an auction the following week, unless the vendor agrees to an offer before the auction happens. Ownership is transferred within another week. Solicitors are usually not required.
Note this all applies to apartments in cities.
I agree with you SM. It's a difficult one to figure out. Any of the issues you have raised (language/currency) do not seem to bother investors in other less 'established' countries.
I would guess that, on informing a friend, that you have invested in Finland, that the response would be comical i.e 'Where???!!!' . Whereas the mere mention of Bulgaria/Hungary, would not warrant a comment.
I would guess that, on informing a friend, that you have invested in Finland, that the response would be comical i.e 'Where???!!!' . Whereas the mere mention of Bulgaria/Hungary, would not warrant a comment.
No, it isn't
Kindly elaborate. Are you are referring to residential property in Sweden?
gnf_ireland
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I would also be interested in hearing about the Finland experiences
San Martino
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Hi,
here is a brief synopsis of my 'Finland experience'. I invested in a few commercial properties with some friends and also purchased a couple of studio apartments on my own - the purchases were made over the last three years. Prior to investing we obtained professional tax advice re Finnish & Irish tax tax and the inter-relationship between the two and legal advice re setting up 'syndicate rules' and purchasing property in Finland.
Our properties yield between 7% and 10% and were financed by a combination of funds from Ireland (borrowed or not) and borrowings in Finland (about 60% of total investment). In my experience, yields are falling and in general are now around the 6-8% range depending on the ususal host of factors (tenant, propety type & location etc).
Overall my experience has been positive - this is not to say that everything has gone perfectly, far from it. I'm looking to invest there again. at the moment.
here is a brief synopsis of my 'Finland experience'. I invested in a few commercial properties with some friends and also purchased a couple of studio apartments on my own - the purchases were made over the last three years. Prior to investing we obtained professional tax advice re Finnish & Irish tax tax and the inter-relationship between the two and legal advice re setting up 'syndicate rules' and purchasing property in Finland.
Our properties yield between 7% and 10% and were financed by a combination of funds from Ireland (borrowed or not) and borrowings in Finland (about 60% of total investment). In my experience, yields are falling and in general are now around the 6-8% range depending on the ususal host of factors (tenant, propety type & location etc).
Overall my experience has been positive - this is not to say that everything has gone perfectly, far from it. I'm looking to invest there again. at the moment.
G
Guest127
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slightly off subject: if yields are so good in scandanavian countries why are they ( finns, danes swedes etc) the biggest property purchasers in turkey? probably to do with climate I suspect and they are purchasing for their own personal/family use as holiday destination.effectively there is no real rental market in turkey so presumably it's not for yield.
San Martino
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Hi bo se,
I do not have friends/family in Finland. I made contact with a number of agents, but only one seemed interested in dealing with us. He is reasonable to work with, but like all estate agents / salesmen (that I know of), you have to double check what they are telling you - they can often omit potential downsides etc.
PS - Coss, thanks for the link to the SBP article. As I recall, Diarmuid Condon also wrote a positive article on Helsinki (in the Irish times, I think) about a year ago.
I do not have friends/family in Finland. I made contact with a number of agents, but only one seemed interested in dealing with us. He is reasonable to work with, but like all estate agents / salesmen (that I know of), you have to double check what they are telling you - they can often omit potential downsides etc.
PS - Coss, thanks for the link to the SBP article. As I recall, Diarmuid Condon also wrote a positive article on Helsinki (in the Irish times, I think) about a year ago.
A
astapasta
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I have been resident in Denmark for 11 years now and have been through the property mill several times having bought and sold both apartments and houses. The signs for Denmark and Sweden are not positive at the moment.. the prices have begun to plateau out and its already becoming a buyers market. I have a feeling that things are due for a downturn here, but i must admit that i have heard good things about Finland recently.
San Martino
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Hi,
It all depends on how the property is being sold. As I understand the situation a mutual real estate company (MREC) is usually used for multi tenanted buildings. Property purchase is more likely to be direct where it is a standalone building. Stamp duty differs is that it is 4% for direct property purchases and 1.6% for MREC purchases.
It is also worth knowing that if an MREC investment is empty, you could still have significant outgoings as the other units in the property are likely to be occupied - you don't get a deduction because yours is empty. If the property is held direrctly (or if you control the MREC) you have more control over outgoings.
So both MRECs and direct ownership have their own advantages / disadvantages but it is really the property that dictates which way you will purchase, rather than it being the purchasers choice.
BTW, these are my personal views, not an expert opinion!
It all depends on how the property is being sold. As I understand the situation a mutual real estate company (MREC) is usually used for multi tenanted buildings. Property purchase is more likely to be direct where it is a standalone building. Stamp duty differs is that it is 4% for direct property purchases and 1.6% for MREC purchases.
It is also worth knowing that if an MREC investment is empty, you could still have significant outgoings as the other units in the property are likely to be occupied - you don't get a deduction because yours is empty. If the property is held direrctly (or if you control the MREC) you have more control over outgoings.
So both MRECs and direct ownership have their own advantages / disadvantages but it is really the property that dictates which way you will purchase, rather than it being the purchasers choice.
BTW, these are my personal views, not an expert opinion!
I am just trying to reconcile a couple of taxation issues on the different methods used.
AFAIK the direct investment is covered by the Tax Treaty as the property is held in the name of the purchaser and the rent is paid directly to them.
On the other hand the rent is paid to a MREC (which is a limited company) and then paid/distributed to the property owner. In your opinion, does this contravene the double taxation agreement?
Also, the Inheritance Tax is (currently) penal in Finland. Would you be of the opinion that it would be wise to put in place some mechanism to compensate for this liability should the worst happen?
AFAIK the direct investment is covered by the Tax Treaty as the property is held in the name of the purchaser and the rent is paid directly to them.
On the other hand the rent is paid to a MREC (which is a limited company) and then paid/distributed to the property owner. In your opinion, does this contravene the double taxation agreement?
Also, the Inheritance Tax is (currently) penal in Finland. Would you be of the opinion that it would be wise to put in place some mechanism to compensate for this liability should the worst happen?
San Martino
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Hi,
In both instances rent is paid directly to the beneficial owner of the property - AFAIK it does not pass through the MREC, although some of the expenses are paid to the MREC (but this should not be an issue for tax relief).
As regards taxation, I paid for professional tax advice and also obtained good legal advice - depending on the amount to be invested, this would be money well spent.
In both instances rent is paid directly to the beneficial owner of the property - AFAIK it does not pass through the MREC, although some of the expenses are paid to the MREC (but this should not be an issue for tax relief).
As regards taxation, I paid for professional tax advice and also obtained good legal advice - depending on the amount to be invested, this would be money well spent.