Overseas Property Capital Growth Example

Off plan property investment and capital growth example.

Many investors and purchasers of holiday homes abroad are attracted by the high capital growth that is possible.

This example shows the difference investing in property can make to net worth over a period of time.

It is a very simplified example and all figures are for illustration purposes only and are not a guarantee of future performance. In these examples the existing mortgages are not paid off.

Mr & Mrs Smith — No Overseas Investment

Current House Value£150,000 Remaining Mortgage£50,000 Equity Available£100,000

Decision: do not invest in overseas property

Assume 10% growth per year:

After 5 Years Own House Value£241,577 Mortgage£50,000 Equity£191,577

Equity After 10 Years£339,061

It is easy to see from this example that long term property investment can make a dramatic difference to a person's net worth.

Mr & Mrs Jones — Invest in Overseas Property

Current House Value£150,000 Remaining Mortgage£50,000 Equity Available£100,000

Decision: invest in overseas property

Invest in two properties at £150,000 each 30% deposit with costs = £50,000 each£100,000 Total value of investment property£300,000

2 years build time:

5% UK interest only mortgage on £100,000 (£165 each for a couple)£330/month 2 years interest payments£7,920 Capital appreciation (20%/year during 2 year build)40% Value after 2 years (£216k each)£432,000 Equity in investment property£132,000

Don't sell at completion (could invest in 2 more properties using new equity). Rent out to cover mortgage.

Assume 10% growth per year:

After 5 Years Investment property value£574,992 + own house£241,557 Total£808,649 Mortgages£350,000 Equity£458,649

Equity After 10 Years£965,092

Please contact us if you would like more information.

All figures are for illustration purposes only and are not contractual.

Overseas Property Capital Growth Example

Mr & Mrs Smith — No Overseas Investment

Mr & Mrs Jones — Invest in Overseas Property

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