For those who wish to go it alone, like to have that deed in their name and be able to claim the spoils of victory for themselves, buy-to-let tends to be the first port of call. Since buy-to-let became a loss making industry in Ireland some years ago, buyers have moved abroad and the Irish are still active in the US and UK in particular, where they are to be found fishing for value. They have, in the recent past, also been active in places such as Spain, France Hungary, Lithuania, Poland and Bulgaria with varying degrees of success.
The principle of buy-to-let is very simple and all in the name – purchasing a property, normally residential, so that you can rent it out – hopefully for a profit. As with guaranteed rental product, a good buy-to-let transaction necessitates a property in a desirable area and a supply of high quality tenants. It will also normally, but not always, involve a good management company as managing property abroad can be incredibly problematic. Again, knowledge of the value of property and the actual achievable rent is essential prior to purchase.
Buy-to-let is suffering somewhat of an identity crisis at the moment as property prices in many countries have meant that the figures don’t add up. The closure of a number of buy-to-let ‘investment clubs’ in the UK has also left the industry there in turmoil. The lesson to be learned from this is that you need to do your own market research. Unless you do the legwork yourself you run a pretty high risk that you’ll be in possession of a non-profitable unit.
Banks have cooled on the whole buy-to-let phenomenon considerably since the credit crisis has hit. They were pushing out 95% BTL loans not that long ago but these same loans are now nigh on impossible to achieve.
If you can get a property at the right price then buy-to-let can work very well. Working from overseas, however, one of the biggest problems is the cost of management which does eat into profits. Unless you have a number of units in close proximity where you can spread the management overhead it can prove a deal breaker.
You can find buy-to-let property from €100k (or even substantially less these days, whether property for less than €100k is worth the investment, however, is an article for another day) which, if you can get an 80% mortgage, will leave a cash investment of around €20k plus expenses.