Overseas Property.
Overseas property a burden
Q. A few years ago I invested in a property in Bulgaria through an equity release loan guaranteed by my home in Ireland. Both properties have fallen in value and I now have a large mortgage that is more than the value of the properties. My income has also fallen and I need to reduce my debt quickly. How should I go about selling the overseas property, and is this the right move?
A. You have recognised that your finances are precarious and this is a great first step. Interest rates are expected to rise in Ireland and if your income has dropped it is important to reduce your debt and outgoings as much as possible, as soon as possible. Without knowing the details of your properties and finances, it is hard to judge the best way forward. However, selling the property in Bulgaria sounds like a good option in order to protect your home here, which I assume is your principal residence, and also your credit rating. I would suggest that you move quickly to put the processes in place. The following steps may help you on your way:
Communicate with your mortgage provider. If you are in danger of not being able to pay the mortgage, first and foremost you should talk to your mortgage provider, explain the situation and outline your action plan. It may be possible to renegotiate a payback plan while you address the situation. Even if you are not close to defaulting, it is a good idea to keep your mortgage provider updated.
Understand the overseas market. Do some research into the Bulgarian market to find out who is buying in the area and for how much comparable properties are selling. The Bulgarian National Statistical Institute tracks the market price of ‘dwellings’ and may be a good source of information (www.nsi.bg/index_en.htm). Some markets attract buyers from particular countries or regions. Establish which countries are showing investment interest in Bulgaria and make this your target market for selling your property.
Find an agent with the right contacts. If you are unable to travel to the property yourself, you will need an agent who can advertise the property and look after viewings. The agent with the lowest commission is not necessarily the best. Make sure you chose a reputable agent with good contacts in your target market. Find out if they are accredited or are members of a professional body (similar to the Institute of Auctioneers and Valuers in Ireland). You may be able to find an international agent with offices in Ireland that can also represent you in Bulgaria. The European Confederation of Real Estate Agents has over 66,000 members across 14 European countries (www.web-cei.com). Be clear about your expectations from the start and keep in regular contact. Make sure you don’t tie yourself in to one agent for a long period so that if you are not happy with the service or results, you can look for another agent.
Do your own promotion. Advertise the property online and in magazines likely to be read by your target market. You could appoint an online agent also, but before appointing a second agent check existing and new contracts for ‘sole agent’ clauses.
Keep the property in good condition. The property must be well presented to entice viewers into buying and should preferably be furnished, or at least complete in build, as this may make it more attractive for investment buyers. Investigate any particular requirements or preferences in your target market and, if at all possible, meet them. If the property has a management company, keep in touch to ensure that it is looking after any communal areas and request that any existing problems are dealt with straight away. If you are not able to visit the property to inspect the condition, get your agent to visit before any viewings take place. Make sure any debts have been settled, such as water rates or electricity bills.
Have the documentation ready. If you do find a buyer, you need to be ready to close the deal quickly and efficiently. Make sure you have the title deeds, contracts and other legal documentation ready and that everything is in order. Have a solicitor on board who understands the intricacies of selling an overseas property – past experience is a good indicator of knowledge in this area. It is also advisable to talk to a financial advisor or an accountant about the capital tax implications here and abroad.
Overseas property a burden
Q. A few years ago I invested in a property in Bulgaria through an equity release loan guaranteed by my home in Ireland. Both properties have fallen in value and I now have a large mortgage that is more than the value of the properties. My income has also fallen and I need to reduce my debt quickly. How should I go about selling the overseas property, and is this the right move?
A. You have recognised that your finances are precarious and this is a great first step. Interest rates are expected to rise in Ireland and if your income has dropped it is important to reduce your debt and outgoings as much as possible, as soon as possible. Without knowing the details of your properties and finances, it is hard to judge the best way forward. However, selling the property in Bulgaria sounds like a good option in order to protect your home here, which I assume is your principal residence, and also your credit rating. I would suggest that you move quickly to put the processes in place. The following steps may help you on your way:
Communicate with your mortgage provider. If you are in danger of not being able to pay the mortgage, first and foremost you should talk to your mortgage provider, explain the situation and outline your action plan. It may be possible to renegotiate a payback plan while you address the situation. Even if you are not close to defaulting, it is a good idea to keep your mortgage provider updated.
Understand the overseas market. Do some research into the Bulgarian market to find out who is buying in the area and for how much comparable properties are selling. The Bulgarian National Statistical Institute tracks the market price of ‘dwellings’ and may be a good source of information (www.nsi.bg/index_en.htm). Some markets attract buyers from particular countries or regions. Establish which countries are showing investment interest in Bulgaria and make this your target market for selling your property.
Find an agent with the right contacts. If you are unable to travel to the property yourself, you will need an agent who can advertise the property and look after viewings. The agent with the lowest commission is not necessarily the best. Make sure you chose a reputable agent with good contacts in your target market. Find out if they are accredited or are members of a professional body (similar to the Institute of Auctioneers and Valuers in Ireland). You may be able to find an international agent with offices in Ireland that can also represent you in Bulgaria. The European Confederation of Real Estate Agents has over 66,000 members across 14 European countries (www.web-cei.com). Be clear about your expectations from the start and keep in regular contact. Make sure you don’t tie yourself in to one agent for a long period so that if you are not happy with the service or results, you can look for another agent.
Do your own promotion. Advertise the property online and in magazines likely to be read by your target market. You could appoint an online agent also, but before appointing a second agent check existing and new contracts for ‘sole agent’ clauses.
Keep the property in good condition. The property must be well presented to entice viewers into buying and should preferably be furnished, or at least complete in build, as this may make it more attractive for investment buyers. Investigate any particular requirements or preferences in your target market and, if at all possible, meet them. If the property has a management company, keep in touch to ensure that it is looking after any communal areas and request that any existing problems are dealt with straight away. If you are not able to visit the property to inspect the condition, get your agent to visit before any viewings take place. Make sure any debts have been settled, such as water rates or electricity bills.
Have the documentation ready. If you do find a buyer, you need to be ready to close the deal quickly and efficiently. Make sure you have the title deeds, contracts and other legal documentation ready and that everything is in order. Have a solicitor on board who understands the intricacies of selling an overseas property – past experience is a good indicator of knowledge in this area. It is also advisable to talk to a financial advisor or an accountant about the capital tax implications here and abroad.
Overseas property a burden
Q. A few years ago I invested in a property in Bulgaria through an equity release loan guaranteed by my home in Ireland. Both properties have fallen in value and I now have a large mortgage that is more than the value of the properties. My income has also fallen and I need to reduce my debt quickly. How should I go about selling the overseas property, and is this the right move?
A. You have recognised that your finances are precarious and this is a great first step. Interest rates are expected to rise in Ireland and if your income has dropped it is important to reduce your debt and outgoings as much as possible, as soon as possible. Without knowing the details of your properties and finances, it is hard to judge the best way forward. However, selling the property in Bulgaria sounds like a good option in order to protect your home here, which I assume is your principal residence, and also your credit rating. I would suggest that you move quickly to put the processes in place. The following steps may help you on your way:
Communicate with your mortgage provider. If you are in danger of not being able to pay the mortgage, first and foremost you should talk to your mortgage provider, explain the situation and outline your action plan. It may be possible to renegotiate a payback plan while you address the situation. Even if you are not close to defaulting, it is a good idea to keep your mortgage provider updated.
Understand the overseas market. Do some research into the Bulgarian market to find out who is buying in the area and for how much comparable properties are selling. The Bulgarian National Statistical Institute tracks the market price of ‘dwellings’ and may be a good source of information (www.nsi.bg/index_en.htm). Some markets attract buyers from particular countries or regions. Establish which countries are showing investment interest in Bulgaria and make this your target market for selling your property.
Find an agent with the right contacts. If you are unable to travel to the property yourself, you will need an agent who can advertise the property and look after viewings. The agent with the lowest commission is not necessarily the best. Make sure you chose a reputable agent with good contacts in your target market. Find out if they are accredited or are members of a professional body (similar to the Institute of Auctioneers and Valuers in Ireland). You may be able to find an international agent with offices in Ireland that can also represent you in Bulgaria. The European Confederation of Real Estate Agents has over 66,000 members across 14 European countries (www.web-cei.com). Be clear about your expectations from the start and keep in regular contact. Make sure you don’t tie yourself in to one agent for a long period so that if you are not happy with the service or results, you can look for another agent.
Do your own promotion. Advertise the property online and in magazines likely to be read by your target market. You could appoint an online agent also, but before appointing a second agent check existing and new contracts for ‘sole agent’ clauses.
Keep the property in good condition. The property must be well presented to entice viewers into buying and should preferably be furnished, or at least complete in build, as this may make it more attractive for investment buyers. Investigate any particular requirements or preferences in your target market and, if at all possible, meet them. If the property has a management company, keep in touch to ensure that it is looking after any communal areas and request that any existing problems are dealt with straight away. If you are not able to visit the property to inspect the condition, get your agent to visit before any viewings take place. Make sure any debts have been settled, such as water rates or electricity bills.
Have the documentation ready. If you do find a buyer, you need to be ready to close the deal quickly and efficiently. Make sure you have the title deeds, contracts and other legal documentation ready and that everything is in order. Have a solicitor on board who understands the intricacies of selling an overseas property – past experience is a good indicator of knowledge in this area. It is also advisable to talk to a financial advisor or an accountant about the capital tax implications here and abroad.