Expat Investor

Hi Everyone,

Expat Brisbane lad here in my late 40's. Have about A$600K in savings to invest in some properties on the Gold Coast and Brisbane this year if possible prior to a move back in the next few years. I have appointed a Solicitor and are now commencing the process to find a good mortgage broker and buyers agent with experience in these areas.

Are there any other overseas based investors on the forum or people that have experience with overseas clients?

Regards,
Andrew

 

Might want to talk to the mortgage broker first.

 

Yas. Banks have tightened lending to overseas investors. But with that sorta of deposit you should be able to buy 1-2 properties.

 

If I had that sort of deposit, I might be tempted to go for commercial, something like this.
Though it could be a little bit risky for your first IP (commercial tenants are harder to find than residential).

 

Hi @OZinUK Andrew

Welcome to PC.

Thats a decent deposit.

As already mentioned, lending to expats and other overseas investors have tightened in recent times (actually tightened generally!). However, there are still some options given you are an Australian citizen.

Key would be your income, as lenders shade PAYG foreign income by 20% to 30% depending on who to go to, and some also prescribe a less than favourable FX rate for conversion to AUDe for calculating your borrowing capacity.

 

The first step is to find out how much you can borrow and then you can provide your buyers agent with your requirements including budget.

Expat lending has unfortunately been caught up in pure non resident lending restrictions.

CBA is the best lender in this space in terms of LVR and loan amounts - they take 80% of the converted income but have an excellent LVR policy in that they treat you the same as if you were living in Oz (assuming you are an Aussie citizen).

Whereas there are other lenders that take 90% of the converted income but they do have loan amount and LVR restrictions.

 

With the way lenders are treating foreign income these days, only about 50% of the income actually gets used. Not only do they take only about 80% of the income for currency fluctuation purposes, they also treat the tax rates quite unfavourably.

In my recent dealings with expat lending, I've gotten the impression that lenders go out of their way to look for reasons not to lend the money. They take the most conservative view they possibly can. It's a far cry from what it was a few years ago.

 

I'd hazard a guess that $600/m² nett is only double (but closer to triple) the market rent for a comparable (Linky).

@DaveM - deal of the century.

 

A "little bit" risky? I've read multiple times that it is not uncommon for commercial properties can be vacant for YEARS at a time. If the person buying it does not have a high income from other sources (such as a big residential property portfolio or other reliable income) then they could be forced to sell and take a big loss if the markets is poor at the time.
As I understand it, this is why commercial is often used later during the debt consolidation phase, not your acquisition phase, where later on if you do have a vacancy, you have a lot of residential property income behind you to make sure you are not forced to sell and take a loss in a bad market.
Also this is a 1.5m commercial property. The risk with a purchase this large means the OP could take a lot of years to recoup the losses.

Either what I have heard is wrong, or this is not a "little" risky.
Please correct me if I am wrong - always happy to learn..

 

I appreciate everyone taking the time to reply. I will take your advice on board and continue to research the implications of investing whilst living abroad. Hoping that 2018 can be a good one.

 

Hi Andrew

Welcome to the forum. Brissie based normally but over in the UK for a few weeks getting my annual dose of Premier League football.

Certainly got a little harder for Expat lending as mentioned however number of good lenders still in this space.

We do a lot of Expat and Non Resident lending and surprised as to how many investors are starting to realise the charms of Brisbane when it comes to investment.

Cheers


Richard