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Euro Ski Property Thread

Discussion in 'Europe' started by Undies, Aug 13, 2014.

  1. Chester

    Chester One of Us

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  2. greensnow

    greensnow Hard Yards

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    keep dreaming, dreams are free.

    Don't wish to kill any dreams, but how could you negatively gear a place overseas? It is impossible to get a bank loan as a non-resident and with an overseas occupation in any country. To the same extent an Australian bank isn't going to lend you money for a property overseas. The result being you pay marginal tax rates in Australia on every dollar you profit.

    Take it from an accountant, you are better off parking that money somewhere clever and spending the yield (which would be a lot on $300k-500k apartments) on your holidays. Unless you can drive to your holiday house on the weekends the benefit isn't there.

    Of course then you cannot tell your friends at the ski club or co-workers you own a chalet in Chamonix. If you do buy property overseas, just be aware of what you are foregoing for the sake of attaining that intangible feeling of owning a little part of an exotic place - which wears off after 2-3 years.
     
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  3. cold wombat

    cold wombat Twitter Contributer Moderator

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    Surely if you have enough income & equity in AU real estate that you could mortgage it would be doable?

    But that's sort of irrelevant for most of us. This is a dream thread.

    :)
     
  4. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    if you borrow money in Oz, you run the exchange arbitrage risk.

    better if you can borrow in the destination country, so your rental income currency your mortgage currency and eliminates that exposure from your equation
     
  5. greensnow

    greensnow Hard Yards

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    Who will lend money to you in your destination country?

    There were some dodgy deals being done in Niseko marketing the use of Japan's low interest rate, but all they were doing is inflating the price of the apartments and pre-paying the interest with a Hong Kong bank. Ala interest-free finance deals for cars in Australia.
     
  6. cold wombat

    cold wombat Twitter Contributer Moderator

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    Shutup. We're dreaming.

    ;)
     
  7. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    I know canadian banks will loan aussies 75% of the value
     
  8. piolet

    piolet Better make it three Ski Pass: Gold

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    Not only that but you get these cards that say 'citizen of chamonix-mont blanc'
    Sweet deal
     
  9. Chester

    Chester One of Us

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    What sort of security do they ask for?
     
  10. Chester

    Chester One of Us

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    I agree with most of this, except for that Australian banks will lend money for overseas investment if you have enough equity &/or income in Australia. I've already inquired and had a line of credit approved, however the bank was very conservative with the amount they would lend.
     
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  11. greensnow

    greensnow Hard Yards

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    That's interesting, are rates high being unsecured?

    Bank lending for a property in whistler would be nice. That would be unreal. They wouldn't even give Australians credit cards when I was there.
     
  12. Chester

    Chester One of Us

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    I didn't say anything about the bank agreeing to an unsecured loan. :)

    Rates are the same as borrowing for an Australian investment.
     
  13. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    no idea, havent gone that far.

    but if they loan 75% then it would be the property in question I presume
     
  14. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    its a shame that aussie interest rates are high compared to overseas possibilities
     
  15. Chester

    Chester One of Us

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    I suspect they'd also want proof of income. Otherwise, how would they be assured someone would be able to service the loan?
     
  16. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    of course. you would need to demonstrate taxable income etc etc and I understand this is a laborious, bit expensive process initially
     
  17. Chester

    Chester One of Us

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    If 'someone' was living/working in Australia, then I think it's a better strategy to invest in Australia and then just rent overseas. Buying overseas would be a better option down the track, when that 'someone' was retired (or closer to retirement), more cashed up, and able to better justify the purchase by living (or spending longer periods of time) in the overseas property.

    A property investment in one Australia's major cities would generate a more stable and secure rental return, better capital appreciation and tax benefits. Then over time, when the time is right, sell the Australian property and buy the dream overseas.
     
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  18. WaitAwhile

    WaitAwhile One of Us Ski Pass: Silver

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    "Buying overseas would be a better option down the track, when that 'someone' was retired (or closer to retirement), more cashed up, and able to better justify the purchase by living (or spending longer periods of time) in the overseas property"

    Couldn't agree more with Chesters comment.
    Even if someone was in a "semi-retired" state and wanted to start slowing down and spent a few months at a time based in a Euro resort it may make sense.
    I've never been to keen on waiting till retirement to fund those plans as you may never get there or ill health may prevent you doing what you really enjoy.
    Enjoy life while you can.
     
  19. Chester

    Chester One of Us

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    Agreed, we're a long time dead.

    There are a lot of variables that come into play ... age, health, career, income, investments, financial obligations, family responsibilities etc. etc. ... so it's matter of each individual finding the formula that works best for them.

    My philosophy is to maximise my enjoyment on the snow whist still physically able.
     
  20. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    except that post-GFC, ski properties are probably as cheap as they will ever be, whereas Australian property prices are currently as high as they have ever been.

    you strategy runs the risk of those ski properties eventually recovering pricewise and becoming unaffordable
     
  21. Chester

    Chester One of Us

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    Australian property prices were also as high as they've ever been 5, 10, 15, 20 (and so on) years ago ... that does't mean that they won't go higher. In my experience, the value of 'good' Australian property rarely goes down. It's more about how slowly or quickly it goes up.

    My strategy is based on the theory that an investment in Australian property investment will grow at a better rate over the same period of time than the same value property investment in the village where I live in France. I'm also factoring the year round rental and tax benefits of an Australian property investment, and the very low rent that i'm paying here in France.

    Personally, I'm more confident in the Australian property market, and as long as I can use common sense, there will always be growth over the medium to long term. I believe there are still suburbs in Melbourne (where I'm originally from) that will yield growth, so that's where I'd rather look to invest now. Of course there then is the exchange rate variable that needs to be factored into the equation, but that's always going to be a 'roll of the dice' at any given time.

    What I know about the market here in my little pocket of France is that it's flat, and has been for at least the 8 years that I've been here. Does that mean it will go up? I don't think so, but I'm willing to take that risk. A couple of years ago, I was more in a hurry to invest in property here, but my decision was purely emotional. Now I've just moved into much a better rental, I'm looking at things more from an investment perspective.

    So, if you think you're better off investing in somewhere like Sun Peaks rather than in Australia, then I say with all sincerity, go for it. Clearly you know a lot more about the property market over there, whereas I know absolutely nothing.
     
    #71 Chester, Aug 16, 2014
    Last edited: Aug 16, 2014
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  22. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    I mentioned in another thread, purchasing a ski property is rarely considered an investment - lifestyle investment most likely.

    the advantage in owning is that you can generally go when you want to go, not when the property is vacant and of course its up to you how much you want to rent it out.

    I dont consider my own home as an investment. if it was I'd make different decisions around how I spend on it
     
  23. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    and I'd definitely kick the current tenants out! LOL
     
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  24. Chester

    Chester One of Us

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    How much you want to rent it out ... or how much (and for how much) you can rent it out? That's what I'd be researching.

    Unless you're willing to rent your property out to a permanent tenant (12 months a year), no matter where in the world your ski property is, there will be many weeks during a calendar year that it will be empty. In reality, it will be vacant for more weeks of the year than it is rented.
     
  25. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    why is why it shouldnt be classified as an investment -any rent received is merely helping pay the bills
     
  26. Chester

    Chester One of Us

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    Agreed. But from a personal perspective, I'm not in the habit of borrowing large sums of money and subsequently paying interest purely for lifestyle purposes. For example, I wouldn't borrow to buy an expensive car unless I could write it off against my tax. Nor would I borrow huge amounts for property unless it was my principal place of residence, or it was an investment. Would I buy a holiday property for the purpose of lifestyle? Absolutely!! But I'd rather do it with 100% (or a very high percentage of) cash. However, my situation is different to yours, and everyone else's, and we all make decisions based on our own personal situations and motivations.
     
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  27. CarveMan

    CarveMan Pool Room Ski Pass: Gold

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    Shut up and take my money.
     
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  28. dawooduck

    dawooduck relaxed and comfortable Ski Pass: Gold

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    There are good reasons for the term "second home".
     
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  29. dawooduck

    dawooduck relaxed and comfortable Ski Pass: Gold

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    and the term "trophy wife" and "second home" can have similar financial implications.
     
  30. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    a second home isnt THAT expensive LOL
     
  31. WaitAwhile

    WaitAwhile One of Us Ski Pass: Silver

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    At least you can rent out your "second home" for short term lets when its not being used, not sure how the trophy wife would feel about being "rented out".
    Definitely wouldn't want to share her with other family and close friends either.
     
    #81 WaitAwhile, Aug 16, 2014
    Last edited: Aug 16, 2014
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  32. cold wombat

    cold wombat Twitter Contributer Moderator

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    "Trophy wife" is normally a quite capable property manager who is able to sort the demands of competing tenants quite competently. Conflicting demands for occupancy are normally handled very discretely.
     
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  33. climberman

    climberman CloudRide1000 Legend Ski Pass: Gold

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    renting out a second home is a PITA - clean it, pack your stuff away, empty everything out, the clean up after others, get the laundry done, unpack every time you want to use it.

    It can be done but isn't as easy as it first seems. You've got to really decide to be making dough off it and treat yourself as client/tenant.

    Not all premises are well set up for that kind of turnover and use either.
     
  34. climberman

    climberman CloudRide1000 Legend Ski Pass: Gold

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    Typically, you don't even know there's another tenant there at all!
     
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  35. cold wombat

    cold wombat Twitter Contributer Moderator

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    This. You have to be just another short term tenant (who gets priority booking if you so desire).
     
  36. cold wombat

    cold wombat Twitter Contributer Moderator

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    The sign of a very capable property manager!
     
  37. dawooduck

    dawooduck relaxed and comfortable Ski Pass: Gold

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    Buy in Oz, Receive guaranteed tax deductible rental pa with capital gains and take a holiday where ever you want every year.
     
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  38. WaitAwhile

    WaitAwhile One of Us Ski Pass: Silver

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    Apartments are generally better suited and you do need a storage area/room that you can lock up within the apartment.
    Most ski resorts have cleaning companies that come in after clients have left and do a linen and clean for a fee.
    The internet also allows you to let the cleaning company know if you want fresh hire linen or you will use your own and whether you will clean the place or you want them to, for a fee.
     
  39. LMB

    LMB Old but definitely not Crusty! Ski Pass: Gold

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    ^ This! ^
     
  40. hatto

    hatto One of Us Ski Pass: Gold

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    +1 use it and anything else is a bonus
     
  41. hatto

    hatto One of Us Ski Pass: Gold

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    If you have to borrow and can, t service the debt on your own, then it may not be the right investment.
     
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  42. WaitAwhile

    WaitAwhile One of Us Ski Pass: Silver

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    Slightly off topic, but there was a article in todays edition of the AFR regarding please explain notices from the ATO to owners of holiday homes that were claiming deductions and "Having the property available for rent" but not really generating any income or blocking out all the peak periods, which for many homes in country towns would mean the properties would generate almost zero income.

    http://www.afr.com/p/business/property/ato_goes_after_holiday_home_rorts_bzyNYWGYOvxRWrD3kwEFpJ
     
  43. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    its a requirement that if you use the property for yourself, then you cant claim expenses for that corresponding period.

    some people are a bit stupid and its not surprising that an audit would ping them
     
  44. Chester

    Chester One of Us

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    "I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra." - Kerry Francis Bullmore Packer
     
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  45. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    its not tax evasion, its tax optimisation, with $0 being the optimal amount LOL
     
  46. Undies

    Undies Pizza! Ski Pass: Gold

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  47. CarveMan

    CarveMan Pool Room Ski Pass: Gold

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    Some friends of mine have a house just behind that.
     
  48. Barras

    Barras Addicted

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    I just stayed in this building in March, I was checking out the prices of the local property while I was there, everything seemed a bit expensive at the time.
     
  49. Apresski

    Apresski Pool Room Ski Pass: Gold

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  50. ODNT

    ODNT Part of the Furniture

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    I must mention at this point we are very experienced house sitters ;)
     
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