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Originally Posted by DianeLouise
Hi again,
If you were to buy a 1-bed at around 500,000 it would include the first years maintenance, management is availble at 5% and not even necessary in year 1 as Nakheel will take care of any defects and you will be paid a year upfront.
Therefore 10% yeild is not impossible and EU buy to let mortgages are available at 5.1% with an introductory discount for the first two years reducing it 2.9.%. Is this still a bad investment?
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Diane can i say thank you for helping me and having a sensible discussion.
The answer to your question is NO is it a fantastic investment in the short term, but 1 year all those inclusive offers is nectar to a bee. And i have mentioned in my previous post living in Dubai does help as its tax free, you could manage the property yourself(properties would become difficult as i assume people have full time jobs) ,throw in cheap furniture etc etc.
Now, that one year incentive and upfront cash payments would certainly help me break even , when i would take into account my flight charges and my stay into account in Dubai during the exchange of property, i haven't even taken voids into account.
When one buys an investment property the most tax efficient way is to borrow the money, so on borrowed money the interest has to be paid, whether the property is let or void.
How many people can get Euro zone mortgages??I am a professional landlord and i certainly cannot get one living in the UK. Yes, those mortgages are available if you invest in Euro land or if you release equity on your main residence in the euro zone for people living within those zones, that rate is also for 2 years(again short term). Further, these rates released on your main residence are not tax efficient, as the interest payments cannot be offset agaist your tax, most important factor for landlords. The deal was available in the UK on your main residence or for first time buyers @5.12% fixed for 2 years by abbey with £999 set up costs before the rate rise kicked in.
But, have you checked the cheapest buy-to-let mortgage??its close to 7.5-8%??
Diane, i am glad we are finally sharing ideas, to your next post ,i would never buy those hotel rooms, that was just information, just like euro mortgages, as dave suggested i would have to turn the kettle on before i found anything in the region of 5-7% or comparable to IC, but that doesn't mean i or anyone else jump what is advertised or what people say?
Myself i started off in 1997, and properties were yielding 17-18%, we have had great success in the UK, but like they say live by the sword and die by it.
The Capital gain has been so incredible, that the tax liability would outstrip the purchase price in the UK, such has been the gains. So, majority of the investors who are currently getting 2-3% are sitting tight and taking in the income ,rather than capitalising on the gains. There is a relief if you hold the property for 10 years(taper relief),then you are taxed on 60% of the gains made, still massive.
My aim was never to discourage anyone out there, i wanted to test the waters in Dubai as UK has certainly saturated, the best way was to buy something cheap and with high yields, that is how i got exposed to IC and my homework online exposed me to this forum, as these are best places to get an honest opinion away from the sharks, who always show the nectar side to the bee.
IC has been an experience and a learning curve for alot of people. I won't say its been all bad, there are people like you and Kully(moderator) who have had good experiences and think positive and there are those who have had a sour taste because of dishonest people like ARY , efficient and greedy companies like Nahkeel, who left the icing on the cake for themselves, AND CUT THE SURE SUCCESS OF IC like most projects in Dubai.
Over all I wish all the investors out there the best of luck, but do your homework as that is key to success in these tough times. There are bargains to be had and Diane you have proved it , it has certainly worked for you.
ALL THE BEST!!
