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Financial options for overseas investment property
There are various financial options available when buying property overseas.
- Mortgages
- There are many different overseas and UK mortgages available which our certified independent mortgage professionals can help you with.
- Shared investment finance
- If you cannot afford to buy property on your own, shared investment finance can be a very rewarding option.
- The cost of a property does not necessarily have to be shared equally, and this can be reflected in the percentage of the property you own.
- But when buying with relatives, friends, or even acquaintances it is extremely important to detail everything in documents drawn up beforehand in case of a dispute or unseen circumstances.
- Pension finance
- It is possible to invest in overseas residential property with a self-invested personal pension (SIPP). A SIPP allows you to borrow up to 50 percent of the value of a pension fund to buy property. For example, you will need a fund of £100,000 to buy a £150,000 property.
- There are no restrictions on separate SIPP's purchasing one property, so a husband and wife, for example, could combine their pensions to purchase a property. Pension schemes can offer significant tax advantages, and investing wisely could lead to a very profitable pension when the property is sold.
- However, as SIPPs can be complex and full of pitfalls, our advice is to seek specialist financial pension advice before considering holding property within a SIPP.
- Investment fund finance
- It is possible to pool individual resources under the management of an investment advisor or fund manager.
- For example, a fund manager could set up a fund that requires at least £10,000 per person, from no less than 500 investors. This would provide a fund of £5,000,000 to invest in property generating rental income and capital appreciation.
- Investment funds can be a very profitable way to invest depending on the expertise of the fund manager, but you can often have little involvement. Decisions are generally made by management on behalf of all investors. There is also an associated cost for this service, usually a percentage of the value.
- Stock and share finance
- Stocks and shares can be a quick way to make money. But they can also be a quick way to loose money. Thousands of pounds can be lost overnight. And in the current global economic climate even stocks of financial pillars, the major investment banks once thought untouchable, have crumbled. In these times especially, many investors move their money to the safe haven of bricks and mortar.
- Company asset finance
- It is possible to secure finance against company assets. Typically these loans are tied to inventory, accounts receivable, machinery and equipment, but could also include trademarks or even intellectual property.
- This type of financing is usually only taken out when the normal routes of raising funds, such as selling shares or mortgage secured bank lending, is not possible.
- Company asset finance is usually accompanied by high interest rates and if the loan is not repaid, the asset will taken by the bank.