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Buy to let abroad

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Aug 8, 2022

Buy to let abroad

Mortgages & lenders for overseas buy to let properties

Many people contact us to enquire about purchasing a buy-to-let investment in Europe and elsewhere. This is a great way to make an income and allows you to travel.

It can be more complicated than buying property in the UK for many. This is because each country has its own rules, taxes, and processes for property prices. Sometimes, even a different language.

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What to consider when buying to let a property abroad

There are many things to consider when buying a Buy To Let property. But the good news? Our advisors are experts in overseas property buy-to-let mortgages.

We have a few mortgage providers lending for an overseas property purchase. Contact us today to discuss free of charge with no obligation for an overseas mortgage deal.

We’ve compiled everything you need to be comfortable as well as where you can get advice.

What are the steps to get a mortgage abroad for a buy-to-let purchase?

There are several ways to raise money if you want to buy a Buy to Let mortgage to finance property overseas.

  • Lenders from the UK
  • Fundraising for a UK property
  • Local international lenders

International Buy to Let Mortgages from UK Lenders

International Buy to Let Mortgages are available from UK-based lenders

These lenders can offer mortgages to UK residents buying overseas and secure the mortgage for that property.

Most UK lenders won’t offer this service because the laws and rules in each country are different. Lenders with a base in the country tend to offer this service.

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You can raise capital for a property that you already own

You can also raise sufficient funds to purchase a home overseas if you own a property in the UK.

You could raise funds through the following:

Purchasing your Buy to Let property overseas could be made more accessible by raising enough money without taking out a mortgage. Some individuals may be able to buy an overseas property without needing to refinance their existing property to release equity.

It could be because they have recently sold a property, which allowed them to invest.

Many buyers don’t have the means to pay this amount, so they use a refinance to purchase another property.

You should consult an international Buy to Let mortgage advisor if you are interested in either option. They can help you determine if either option is feasible based on your credit history and financial situation.

A mortgage advisor can help you find the best interest rates for your situation, whether you can remortgage the property or get equity out of it.

Enquire here today to speak with our specialist overseas mortgage brokers.

Use an international lender

You can also use a local lender to buy in the country that you are purchasing.

This allows you to compare both mortgage deals in the UK and mortgage deals in other countries. You might get a better deal if you live in a part of Europe where mortgage rates are lower than those in the UK.

We can match you with a mortgage specialist who is familiar with the area, whether you’re looking for a Spanish Buy to-Let Mortgage, a Buy to Let Mortgage in the USA or a mortgage with another overseas lender.

Unless you use a specialist broker, you only have access to a third of the Buy To Let mortgages that are available.

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Do I need to deposit more to get a Buy to Let mortgage on property overseas?

Due to the higher risk of overseas Buy to Let Mortgages being deemed riskier by lenders, overseas residents and UK residents with Buy-to-Let mortgages often require a higher deposit.

Some countries, such as Spain, will require a 30% deposit from Buy-to-Let lenders.

In some countries, a non-refundable security deposit is required to secure the property. This deposit must be paid upon acceptance of an offer.

This is why you should always seek legal advice before signing any Buy to Let agreement in Spain, the USA or Cyprus. Your solicitor can also help you to negotiate your terms.

How can lenders determine my ability to pay for a Buy to Let abroad?

When evaluating a Spanish mortgage application, any lender must determine whether the applicant can afford the mortgage payments.

A Buy to Let mortgage application to an overseas property will require the borrower to show proof that their rental income can cover the mortgage payments.

They might also ask for proof of income, such as savings, pensions, or income from current employment. Your other income could be used to help you pay your mortgage if you cannot find a tenant.

Each lender has its criteria to determine affordability. This is why it’s essential to seek advice from an international Buy to Let mortgage expert before you apply. It will help you understand which lenders will likely accept or reject you.

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What maximum amount can you borrow to get a BTL mortgage overseas?

Most lenders will limit the number of mortgages they lend overseas residents to 4.5x their annual income. However, some lenders may cap it at 5.

A few lenders will consider lending up to 6x your annual income in exceptional cases. This loan is usually available to borrowers with a good credit record and higher income.

This section provides more information.

Can bad credit impact an overseas Buy-to-Let mortgage application

For overseas Buy to Lets, applicants may be subject to criteria similar to residential mortgages.

Lenders see Buy to Lets as a greater risk, there might be fewer lenders to choose from. Unfavourable rates could be a problem for buyers.

We work with mortgage brokers who are specialists in finding bad credit mortgages.

Call us today to get the best advice and learn how you can explore all of your options.

What are overseas lenders who buy to let?

Bad credit, also known as ‘adverse credits’, is a term that describes a poor record in repaying credit obligations.

These are UK terms, but they could be used in other countries and languages.

Can you buy to let abroad with bad credit?

If you have bad credit, you are getting a Buy to Let mortgage overseas may be possible. Some lenders will approve your mortgage with defaults. This is because there has been a default on secured loans, which can be a severe type of default.

Again, this can vary from country to country. It all depends on how severe the incident was, when it happened and the result.

These cases often see a higher deposit which can increase the chances of getting a mortgage. However, this is not always true. It is essential to get the right advice.

It is best to seek out help from an expert on adverse credit. You can also check your credit history to determine if you have any financial problems.

One of our advisors can help you if you are worried about your credit score or need some assurance. If you’re based in the UK, you can check your credit history at CheckMyFile, Credit Monitor (Call Credit), or Experian.

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How will a Buy To Let abroad affect my tax?

Many financial considerations should be taken into account when buying overseas property. We get many questions about taxes and what a Buy to Let landlord must pay to purchase an overseas property.

We are also asked about what happens after the purchase. Many landlords want a portfolio of properties in the UK and overseas. But how does this impact the tax that they pay?

Here are some of the most common situations we have seen over the years when helping homeowners.

Are there any tax considerations when you buy to let overseas?

The country’s buying laws will cover the costs of purchasing a Buy-to-Let property overseas from a UK property owner. This means that Stamp Duty and the 3% surcharge for Stamp Duty in the UK are unlikely to be applied.

However, this does not mean you won’t have to pay foreign taxes. You may be subject to income tax and purchase tax. Every country has its own tax rules. Before you buy a property, make sure you consult a UK mortgage expert and a tax expert local to the country.

What income tax do I have to pay on my overseas Buy-to-Let property?

You may have to declare income tax if you earn money from anywhere other than England, Scotland or Wales.

If you are not a UK resident and your permanent residence is outside the UK, you won’t likely have to pay UK income tax.

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How to manage your Buy to Let property abroad

You will need to manage your Buy to Let property to ensure it is habitable for tenants and to take care of any issues with the tenants or building.

You have two options to manage your Buy to Let property.

  • You can do it yourself
  • Locate a property management agency

Manage your BTLs abroad yourself

Although it will save you money on agent fees, managing the property yourself leaves you with the responsibility of finding tenants. This can be time-consuming, particularly if you don’t speak the area’s language or own multiple properties.

This is also something that many people struggle with, so it’s worth considering.

If you live in the UK, it may be harder to maintain a Buy to Let property here in South Africa than a Buy-to-Let property there.

Use an agency

Many overseas Buy to Let landlords prefer to hire a property management company because they have extensive experience managing rental properties and can help with any problems.

The typical property management agency will charge 20% to manage your rental income. This is to ensure that the property is well maintained, that rental payments are paid on time and that you have a tenant.

Unless you are a specialist broker, you only have access to a third of the Buy To Let mortgages that are available. Enquire here today.

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How to find tenants abroad for a Buy to-Let property

Hiring a local agent who can help you list, recruit, and manage tenants is best.

You don’t have to use a property management company/lettings agent to find tenants for your Buy to Let Overseas home. There are many things you can do to promote it yourself.

  • Market to your family and friends using your social media accounts
  • To promote your property/properties, create a Facebook Business Page
  • Make your website
  • Advertise in your local newspaper
  • Advertise on rural tourism websites
  • Ask local businesses if they can let flyers be left in their shops/restaurants to attract tourists
  • Flyers can be attached to local notice boards

Consider these other things when purchasing a Buy-to-Let abroad

  • Your lawyer should be fluent in English and the local language. Some countries don’t accept English paperwork.
  • Ensure your lawyer is familiar with the property laws in the country you plan to buy.
  • Pay attention to the exchange rates, as even a slight change in one’s property’s value or your rent profit could have a significant impact on it.
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What happens if you buy a Buy to Let abroad?

It is important to remember that a Buy to Let property is not regulated under the Financial Conduct Authority (FCA). You won’t have financial Ombudsman Service and Financial Services Compensation Scheme protection if things go wrong.

You might be able to get protection from overseas investors from other countries. This is something you should discuss with one of our expert advisors.

Do I need to seek advice before I apply for a Buy to Let property in another country?

Yes! We recommend that you seek professional advice before you apply for a Buy-to-Let mortgage abroad.

Legal processes in foreign countries can be quite different. Always seek independent legal advice from someone from that country and someone in the UK.

This will help to avoid delays during the purchase process, as different countries may have different rules regarding lending to foreign buyers.

The process can be complicated, and you might not be fluent in the language of the country where you buy. Having someone familiar with the property laws and language can be beneficial.

A mortgage advisor can help you find the best Buy to Let mortgages to finance your overseas property. They will spend their time researching the best lenders for you based on your situation and can help you apply for a mortgage in the UK or abroad.

We can help you find the best places to Buy to Let Spain, Florida villas, and other Buy to-Let properties.

It is important to get impartial and valuable advice, especially in stressful times.

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Where can you find the best BTL lender overseas?

Contact a specialist mortgage broker with experience in handling foreign mortgages.

An expert in this niche will quickly be able to identify the best lenders to compare mortgage rates and conditions.

Our brokers can negotiate international Buy to-Let mortgages for high-street banks like Natwest, RBS and Barclays. They also have access to specialist lenders.

Which countries are most famous for Buy to Let?

The factors influencing the choice of a location for a buy-to-let, overseas property include affordability, distance, potential returns, and cultural factors. These are the top international BTL products that we can arrange.

Spain: Buy to Let Mortgages

It’s a great place to live, with great weather and a low cost of the property.

Mortgages to Buy and Let in the USA

It has an English-speaking population (after a fashion), a strong economy, and a shortage in rental housing at the time this article was written. Our brokers have helped arrange buy-to-let mortgages in Florida and New York and BTL deals in many other states.

French mortgages to buy and let

You can travel much faster because it is just across the channel. There are many bargains available, and the food is delicious.

Bulgarian mortgages to buy and let

It has one of the lowest living costs in Europe, and you can find great bargains in some of Europe’s most beautiful areas.

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Where can I find advice about BTL overseas?

Yes, you can.

Our advisors are experts in Buy to Let Mortgages in all countries.

They can give you the best advice about buying to let in

  • New Zealand
  • Dubai
  • South Africa
  • Portugal
  • Gran Canaria
  • Netherlands
  • Tenerife
  • Australia
  • Cyprus
  • Turkey
  • Portugal
  • Bulgaria
  • Singapore
  • Caribbean
  • Kenya
  • Menorca

Talk to an expert in overseas mortgages for buy-to-let today

Call today to speak with a specialist overseas mortgage broker or send an enquiry.

You can then relax and let us find the right broker for you. We won’t charge you any additional fees and don’t have to mark your credit score so contact us today.

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