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Perilla
Joined: 09 Jul 2010
Posts: 792
Location: Hong Kong
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 Posted: Mon Aug 15, 2011 9:47 am Post subject: |
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| Teacher in Rome wrote: |
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| For example, if you could save �45k that'll give you a 33% downpayment on a �120k house plus a �5k emergency fund. |
While I'm not disputing you on the plan or on your figures, this is a pretty big "if".
If the OP has got student debts to pay off first, saving up the additional �45K for a deposit on an English teacher's wages is going to be a very long-term plan. Just as well, because getting any lending institution to fork out the rest as a mortgage is going to be really hard in the current economic mess.
If the OP could land work in the better-paying countries (Korea perhaps if without an MA) then it would all look a lot more feasible than, say, working in a fun country like Italy. (Getting less fun by the day as the politicians cut back on public holidays, health care, local services...) |
Erm yes, must agree with TiR. Saving �45k is no easy task as a TEFLer, especially when added to the probability that the OP has student loans to pay off also. I may not be a good example, but until into my 40s I never amassed more than �5k, and I spent that on a year's travelling in South America. Even if you can get the mortgage together, property comes with complications and responsibilities, not the least of which is finding reliable tenants who actually pay the rent. And if you're unlucky enough to end up with negative equity ie. the house drops in price after you buy it (this has happened to me) then you might have a big problem on your hands. There's a lot to be said for staying footloose and fancy free, at least until you're well into your 30s. IMO. |
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HLJHLJ
Joined: 06 Oct 2009
Posts: 1218
Location: Ecuador
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| Posted: Mon Aug 15, 2011 6:23 pm Post subject: |
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| Teacher in Rome wrote: |
| Quote: |
| For example, if you could save �45k that'll give you a 33% downpayment on a �120k house plus a �5k emergency fund. |
While I'm not disputing you on the plan or on your figures, this is a pretty big "if".
If the OP has got student debts to pay off first, saving up the additional �45K for a deposit on an English teacher's wages is going to be a very long-term plan. Just as well, because getting any lending institution to fork out the rest as a mortgage is going to be really hard in the current economic mess.
If the OP could land work in the better-paying countries (Korea perhaps if without an MA) then it would all look a lot more feasible than, say, working in a fun country like Italy. (Getting less fun by the day as the politicians cut back on public holidays, health care, local services...) |
Indeed, but the OP was specifically was talking about going to a 'less fun' but higher paying country (Korea as mentioned) with the primary intention of saving a big chunk of money. From the figures I have seen �45k over 5 years or so is perfectly doable in Korea.
Getting the mortgage is not that complicated, even in the current climate. The rules for BTL are fairly straightforward and based on the rental income not your income. The rules have changed, you used to be able to borrow on a 10% deposit and now you need 25%-33%, to hedge against negative equity. I have no idea what the situation is like in other countries but it's perfectly possible in the UK.
Also, UK student loan repayments are not comparable with USA student loans. Not least of which being that (depending on which schedule you are on) they get written off at 60, but also in terms of how much you have to pay at a given time depending on your earnings. |
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Teacher in Rome
Joined: 09 Jul 2003
Posts: 1286
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| Posted: Mon Aug 15, 2011 7:39 pm Post subject: |
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From the figures I have seen �45k over 5 years or so is perfectly doable in Korea.
Getting the mortgage is not that complicated, even in the current climate. The rules for BTL are fairly straightforward and based on the rental income not your income. The rules have changed, you used to be able to borrow on a 10% deposit and now you need 25%-33%, to hedge against negative equity |
That's very interesting - thanks. As a matter of interest, do you know which banks / building societies specialise in buy to let? And would they need to see your credit rating / audited accounts? I have to say, I've always fancied a bolt-hole in London, and wonder whether this would be a good investment to go BTL first. |
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Perilla
Joined: 09 Jul 2010
Posts: 792
Location: Hong Kong
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| Posted: Tue Aug 16, 2011 3:22 am Post subject: |
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| HLJHLJ wrote: |
| From the figures I have seen �45k over 5 years or so is perfectly doable in Korea. |
For the vast majority of TEFLers in Korea this is completely unrealistic, IMO. |
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HLJHLJ
Joined: 06 Oct 2009
Posts: 1218
Location: Ecuador
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| Posted: Tue Aug 16, 2011 5:36 pm Post subject: |
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| Perilla wrote: |
| HLJHLJ wrote: |
| From the figures I have seen �45k over 5 years or so is perfectly doable in Korea. |
For the vast majority of TEFLers in Korea this is completely unrealistic, IMO. |
Perilla, I am not claiming to be an expert on Korea (or ME or anywhere else). However, the general consensus on here from people who do make such claims are that saving $1,000 / month is a reasonable target even at the lower end of the salary ranges, and that most people can easily save more. Obviously, you may have more info or experience on this than I do, I can only base it on what I am told.
Last edited by HLJHLJ on Tue Aug 16, 2011 7:41 pm; edited 1 time in total |
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HLJHLJ
Joined: 06 Oct 2009
Posts: 1218
Location: Ecuador
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| Posted: Tue Aug 16, 2011 7:40 pm Post subject: |
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| Teacher in Rome wrote: |
That's very interesting - thanks. As a matter of interest, do you know which banks / building societies specialise in buy to let? And would they need to see your credit rating / audited accounts? I have to say, I've always fancied a bolt-hole in London, and wonder whether this would be a good investment to go BTL first. |
Pretty much all of them offer BTL mortgages in one form or another. If you have a look here
http://www.moneysupermarket.com/mortgages/
at the Buy To Let tab it shows the current best buys.
We are with Coventry Building Society, but the best option will depend on all sorts of things, like where you are buying, how big your deposit is, etc etc.
I am sure they'll do a credit check, but we've never been asked to provide audited accounts. It might be different if you are classed as self employed though.
Personally I wouldn't choose London, we did have a flat there at one point, but we sold it. For me, the prices are too volatile in London, and the population too transient. I prefer established areas where you can get a family for tenants who will be happy to settle there for a long time. But it very much depends on your long term plans for it and your attitude to risk.
I am not a financial advisor, and can only speak based on my own experience. |
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Perilla
Joined: 09 Jul 2010
Posts: 792
Location: Hong Kong
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| Posted: Wed Aug 17, 2011 3:32 am Post subject: |
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| HLJHLJ wrote: |
| Perilla, I am not claiming to be an expert on Korea (or ME or anywhere else). However, the general consensus on here from people who do make such claims are that saving $1,000 / month is a reasonable target even at the lower end of the salary ranges, and that most people can easily save more. Obviously, you may have more info or experience on this than I do, I can only base it on what I am told. |
You may well be right - perhaps salaries are better than they were when I was there, or maybe it's just that many people are better at saving than me.
I was at the higher end of the TEFL payscale when I worked there for two years (1997-99) but I only came away with about �3 or 4k. But then I did like having a good time ... |
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Teacher in Rome
Joined: 09 Jul 2003
Posts: 1286
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| Posted: Wed Aug 17, 2011 9:07 am Post subject: |
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Many thanks HLJHLJ.
This is interesting:
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| Personally I wouldn't choose London, we did have a flat there at one point, but we sold it. For me, the prices are too volatile in London, and the population too transient. I prefer established areas where you can get a family for tenants who will be happy to settle there for a long time. But it very much depends on your long term plans for it and your attitude to risk. |
I've been reading some horror stories about landlords / tenants (specifically landlords not understanding their legal rights and responsibilities) and it's interesting you mention long-term families. Sounds much less prone to risk. |
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HLJHLJ
Joined: 06 Oct 2009
Posts: 1218
Location: Ecuador
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| Posted: Fri Aug 19, 2011 4:19 am Post subject: |
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As an overseas landlord it's pretty much essential to have a letting agent, and they will take care of all the legal side of things in terms of responsibilities etc. (For a fee of course, between 8%-15% depending how much you want them to do). You can also insure against just about everything, including rental voids, damage by tenants, non-payment of rent, etc. That would be on top of your regular building insurance, but the more you insure against the more it costs, 5%-15% depending on what cover you need.
Again, it depends on your attitude to risk. If you can afford to cover the mortgage for a few months it's not so important to insure against voids, etc. If you know you are close to the bone financially, then you may need to take the lower income for the security.
Houses rented to families bring in less on a �capital/�rental basis than flats in areas with transient populations. But then you will have higher upkeep costs, redecorating and repairing between frequently changing tenants. Long term tenants tend to decorate and even re-carpet themselves. You will usually make bigger capital gains on flats in London, but you can also make big capital losses too. Plus a capital gain is only useful if/when you sell up. We are mainly interested in long term income rather than capital gain, so it's not a big problem for us.
The only time we've had a place really damaged by a tenant was when we let to a friend of a relative. They fell out with the relative and took their anger out on us. Now we keep it strictly business and everything goes through the letting agent. |
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Der_Bomber
Joined: 03 Oct 2010
Posts: 17
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| Posted: Mon Nov 07, 2011 5:41 pm Post subject: |
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| I very much doubt the UK will have a state pension by the time I'm old enough to claim, and if it does the retirement age will be at least 75! |
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