The usual answer is ‘only if you are fortunate enough to have an employer who pays huge amounts of money into a pension on your behalf’.
If you are 40 years old (or younger) with little prospect of saving enough money in 20 years to fund your retirement when you are 65 or 68 years old (let alone when you are 60 years old) what can you do? Wouldn't you be interested in a scheme operated by a substantial British company that can solve this pension problem whereby :-
OK – it’s not an employer paying for your pension but it isn't you either! It is a self financing scheme based on overseas property and backed by a professional overseas property management company.
You have to do something to ‘get the ball rolling’ - in this case by investing in a holiday villa in a desirable location such as Spain or the Caribbean or elsewhere, built by the company. A mortgage covers the bulk and sometimes all of the capital costs. So far nothing is different from what a lot of people are already doing by investing in a second home and working hard to make it cover its costs.
However, instead of you struggling to pay the mortgage, what makes this scheme different is that there is an in-house property management company that organises holiday lettings over the long term so that all outgoings and mortgage repayments are covered and you also get to use the property yourself for holidays.
Over the years your equity in the overseas property builds at no cost to yourself. When the mortgage is paid off you have either an ongoing income stream or you can sell for a cash lump sum. In any event you have a valuable asset that can be passed on through the family. In effect it is a ‘free pension’ and one that you control.
To get the same benefit by putting money into a UK pension fund you would have to be saving net over £1,250 per month depending on your tax status.
Firstly, any overseas property that is going to stand the test of time has to be built to the highest quality of specification and design. That is something that this company specialises in on its own exclusive estates. You can go and see for yourself, contact us for details of a viewing trip.
Secondly, the company has set up its own holiday rental business and ABTA bonded travel agency to find clients to rent your property.
Thirdly, the company has enough overseas properties under management such that it can do deals in the ‘wholesale rental market’ with other tour companies who need extra ‘capacity’ for their own customers.
In this way your overseas property becomes an income generating investment even without your involvement.
To achieve this, in Spain for example, the company requires your property for 24 weeks of the year. (In the Caribbean this is longer). The rental income from 24 weeks covers property management, local taxation, etc. and generates a return on top of 5%.
It is this 5% that covers the mortgage costs.
As there are still 26 weeks available over and above the required 24 weeks you can increase the 5% yield and / or shorten the mortgage repayment time by simply filling extra weeks with your own booking, family, friends, etc. Every extra week you are able to let greatly adds to your returns!
Can it be ‘free’ if you have had to put down a deposit?
Normally in Spain a 30% deposit is required ‘off plan’ overseas properties. When the property is completed either the company will offer a mortgage deal or you can find your own lender. Typically 80% mortgages are the norm (but sometimes 100% mortgages are possible).
Everything depends on the value placed on the property at completion. If the price has risen (and this is likely on exclusive high quality developments) then the mortgage could allow you to reclaim some or all of the deposit. You can then use this to fund another overseas property and build a portfolio. However, you might prefer to have a lower mortgage and a quicker repayment window – the choice is yours.
An example might be:-
A villa purchased for euro 300,000.
A 100% euro mortgage at 4% = euro 12,000 p.a.
The overseas property mortgage is covered by the 5% return after expenses on the original 300,000 investment i.e. euro 15,000.
The above is a general introduction to a very attractive scheme for overseas property ownership and also a potential solution to pension problems. If you would like to know more please contact us and we will arrange for information to be sent.
The figures contained here are for information purposes only, they are subject to change and they are not contractual. Conditions apply.
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