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Investment in overseas property is an excellent way to achieve short and long term returns on investment.
Investors are guaranteed:
 70% guaranteed mortgage from completion
Two year 10% rental guarantee followed by 50% net room rate share
30 days free use of their property each year
Purchasing off-plan means you pay a lower price for your property than it will be valued at completion.
There will be several price rises during the build period which means you will see the value of your property increase over time.
You can sell your property at any time after exchange of contracts.
How to finance your investment property
£1000 ($2000) non-refundable reservation fee** required for reservation of a specific property - you must pay the 30% deposit within 45 days of making your reservation
30% deposit i.e. 30% of the purchase price
When the property is completed the developer will provide a 70% guaranteed mortgage i.e. 70% of the value of your property at completion
£1,000 reservation fee** - nothing else to pay until completion because the developer will pay your monthly interest payment on the 30% deposit
How it works
If you raise a loan to fund the 30% for your deposit, the developer will make the interest payments for this amount on your behalf.
See the example below:
30% deposit required (less £1000 ($2000)) within 45 days of reservation.
Should you choose to borrow the 30% deposit, the developer will pay the loan repayments, including interest, for the 30% deposit until
completion of the specific unit you have reserved. These payments will then be added to the purchase price upon completion.
Example (Sterling):
Property price £200,000.
£1000 reservation fee paid.
The deposit = £200,000 x 30% = £60,000 - £1000 (reservation fee) = £59,000.
Interest on £59,000 @ 6% p.a. = £295 per month, paid for 24 months by the developer = £7,080 added to the purchase price upon
completion.
Example (US Dollar):
Property price $370,000.
$2000 reservation fee paid.
The deposit = $370,000 x 30% = $111,000 - $2000 (reservation fee) = $109,000.
Interest on $109,000 @ 6% p.a. = $545 per month, paid for 24 months by the developer = $13,080 added to the purchase price upon
completion.
Due to the significantly discounted off-plan contract price and the capital appreciation during the construction phase,
it is anticipated that the £200,000 ($370,000) purchase price will have grown to a property value at completion of circa £325,000
($601,250) At this point a 70% loan to value guaranteed mortgage is available and therefore you will be able to borrow up to £227,500
($420,875). This is clearly ample to pay for the £199,000 ($368,000) (purchase price less £1000 ($2000) reservation fee) that you owe
as well as the accrued interest of £7,080 ($13,080) - from the above example.
Assuming you borrowed the maximum loan to value mortgage, available from the example above, you would borrow £227,500 ($420,875)
on which the annual interest payment would be £18,200 ($33,670) based on a rate of 8%. The rental guarantee of 10% of your purchase
price of £200,000 ($370,000) will generate you an income of £20,000 ($37,000) each year, should cover your mortgage payments.
If you wish you could retain the £59,000 ($109,150) loan you took out for the deposit, pay the interest yourself each month,
from completion onwards, and use the money to invest in a further investment property purchase.
The above is an illustration for an accurate break down on your intended investment please call us on 08451 650 420 to speak to
one of our team about your specific plot, your requirements and financial position.
*Subject to status. Terms & conditions apply.
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