Author Topic: Pit Falls of buying 2 properties  (Read 4903 times)

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Offline Scunner

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Pit Falls of buying 2 properties
« Reply #10 on: January 31, 2012, 13:35:13 PM »
quote:
Originally posted by jackstee

500 - 1000 pounds a month rental in UK.
Long term rental in Turkey 500 - 1000 TL after the expense of buying it.


Based on purchase prices of what exactly? Those two figures mean nothing!

I tend to avoid these topics as I would hope that I would get a private message from the asker if they wanted my opinion on buying in Turkey but as the "rent for a year" posse are out, I don't wish to disappoint you all through not giving my predictable alternative view  ;)

Firstly I must be honest and say that renting out is best suited to those looking for that type of rental and income - I don't think it particularly suits those amongst us who consider it due to them having an empty property that hasn't sold. Ask anyone in that situation and they would tell you they'd rather sell and stick the money in the bank.

But there are opportunities and great advantages to buying to let, even these days, be quiet for a moment, yes there are!!! As a long term investment I still see Calis as a good investment - yes I am still biased/deluded perhaps but let me at least explain.

At the property exhibitions I do not see countries that offer anything like what Fethiye offers - can anyone name somewhere else where you can buy a 2 bedroom apartment with pool, 20 minutes walk (MAX) from the seafront prom, in an established and attractive area that has something for everyone (I mean Fethiye, including Calis) for £40k? Anyone? That has flights from nearly every UK airport from the likes of Easyjet, Jet2 and Thomas Cook? Anyone?? I remember Cape Verde arriving on the scene at A Place in the Sun exhibitions - I'd never heard of it but the prices looked brill - sadly you couldn't get a flight to it - unless you were on one of the two a week out of Gatwick.

So we'll stick with our 40k because it's easy maths. Let's say you have it available for 26 weeks rental (May - Oct) and you fill a meagre half of those at £250 a week. £3250. Each year. Rates should go up but let's keep it that they won't for a worst case scenario. Let's put costs at £750, again to keep the maths simple - that's nearly £60 per rented week which is to cover AC (and it will) council tax etc. A net profit of £2,5000 per year.

Now of course the 40k, tucked away in the bank, would make £3600ish net but for how many years - give it 10 years and you can probably half that to £1800.

So the buy to summer let option will pay £50,000 over 20 years and you still have the capital investment, the apartment - which will be worth what in 20 years in an ever improving area. Even if it's still 40k you end up with a return of 90 grand, or £4,500 per year - in a country you can't work in - not too shabby.

What are people proposing to invest in back in the UK? Not many investment properties around here for 40k - 120k maybe so you need to treble your investment, meaning you need to treble your return. That means you need a rental income of £7,500 nett - so you will need to rent out at £625/month - is that possible on a property worth £120k? Not in many parts of the UK.

It's all complicated and I am sure people will say you can't guarantee 13 weeks rental (a good number of my CalisVilla owners can mind you) and that there will be tax to pay, and plenty of other ways to try to undermine the figures - but ultimately, if you want an income to subsidise your retirement to Turkey, all I am saying is that you can't work and it isn't correct to write off investment in rental properties as no alternative to sticking your cash in the bank and no alternative to not buying a place for yourself and spending the rest of your life paying rent - rent in Turkey goes up as regularly as clockwork as a reaction to inflation. Imagine you rented till the day you croaked. What will you need to be paying in 2032? How much will you have paid in dead rent over those 20 years? Renting for a year to see if you like it I can understand, but avoiding buying property because there is easy money to be made at the bank is very short sighted. It's straight forward. One (the bank) will certainly continue to deliver a reducing return over time, and in these times where there are bargains to be had, the other at least has the potential to do the opposite.

Not the answer, just alternative food for your thoughts...

Scunner
Unbiased Estate Agent  ;)



Offline hubblebubble

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Pit Falls of buying 2 properties
« Reply #11 on: January 31, 2012, 17:17:03 PM »
Different things work for different peoples situations, personally i would want to spend time getting to know the area and what constitutes a 'good build' to decide where best to purchase.
My biggest concern would not be the money in the bank versus rental income/ purchase gain scenarios - they will change back and forth, people forget currency exchage rates can devalue lump sums rapidly and that money in the bank might not be quite the best thing in the current financial climate.
Make sure you understand the inheritance law, property being an immoveable asset, also the tax laws regarding renting out and capital gains.
Cover your bases, do your homework, stay off the Efes and dont buy off a waiter, guy you met in a bar, or local taxidriver etc!!
From what I see calis has plenty to keep you happy and occupied all year round, good luck.

Offline happy_flyer

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Pit Falls of buying 2 properties
« Reply #12 on: January 31, 2012, 19:27:35 PM »
So much really really good advice, i knew i was asking the correct people.
Head down time to think and weigh up whats been said.
Shop around for quotes and see whats on the market, really exciting times ahead.
Thankyou all so so much.
If you can think of anything else to numb my mind then please fire away, i'm sure i can take it, good or bad lol.
Scunner when we do get out there i hope we can meet up and keep in touch.

Offline happy_flyer

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Pit Falls of buying 2 properties
« Reply #13 on: January 31, 2012, 21:58:03 PM »
And some others you know who you are lol




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