Investing in Real Estate in home country - IBD Analyst in London
Hi Monkeys,
I am an Analyst starting in IBD in London, coming from one of the "low-cost" countries in Europe. As real estate prices in my home country are appreciating at a rapid pace, and compared to London salary I will be earning, are still quite low.
I had the idea of taking out a mortgage together with my parents (need to do this as no bank in my home country will give loan only to me as I work abroad), purchasing an apartment and renting it out.
Hope that rent will cover most of the loan, but even if not rented I will of course make all of the payments (20 year loan installment will be GBP 300-400 per month, which I think is reasonable for an Analyst). If needed, I think I could pay off the entire mortgage in 2-3 years (by saving bonuses and part of monthly salary).
What do you think of these idea?
Has anyone of you / your friends done something similar?
Haven’t done this myself and seems like a good idea but would recommend you take into account the v high tax rate on bonuses, and London’s very high rent prices before you do this. Also, is there a chance might you want to buy something in London to live in, only for all your capital to be tied up in this property abroad? The U.K. also has lots of weird things about owning 2 homes so that’s also something to think about.
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Yeah, taxed at 40% + NI
That’s not a lot to you?
Thanks, valid points.
I think that the tax rate for bonus (any amount you earn above is GBP 50k) is 40%.
I will consider buying an apartment in London if I decide to stay in banking. Nonetheless, the London real estate prices are so high that they constitute a serious barrier to entry for me, at least at the moment.
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The property would be managed by my parents with the aim that it later serve as a source of their pension later on.
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bump
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