Buying a holiday home abroad?

Thanks for the slowtrav link. Good news for us is that we the place were we are looking to buy is English speaking (Ireland), in a newer development (no Under the Tuscan Sun money pit problems) and in a place where we have a lot of friends and a few connections to the local council.

Financing is obviously going to be a big issue and may be an impossibility in the current lending climate. Property values are way down but are now at a price where we could consider it financially. The home is not in a popular US visitor destination but has the potential to have quite a few renters from the UK during the summer months and with a bit of web presence could be a place where Americans would love to visit-stay for a week on holiday.

We have a lot of rental experience with property here in the US but never any short-stay holiday homes. Obvious potential for a short term tenant to cause a disaster but how high of a risk is it? I assume (and we all know what happens when we assume) that short stay tenants would fall under inn-keeper type rules versus a long term lease holder rules.

I'm looking forward to see if anyone has any insights especially with property in the ROI.

Have you watched House Hunters International on HGTV--which is on cable TV? I have often wondered how the Americans that they feature are able to purchase a home in Italy. What happens with the Schengen agreement in those cases? I am also very curious.

There's a great organization called "International Living" @ www.internationalliving.com. They have a magazine as well.

They sell guides for each country walking you through the process of moving to another country / purchasing a home. You might find it helpful.

Since you have a specific place in mind, the first thing to do might be to check with the town council and see if there are any rules or regulations that limit or control letting out your home to short-term renters. Also check with the development to see if there are any covenants or restrictions there.

Third, if you are planning on deducting the mortgage interest, you'll need to check the IRS regulations that relate to the interaction between deductible interest and rental income. (You probably already know about that since you have rental property in the US, but there may be some twists involved with foreign property.)

Another issue, I would think, would be, how long can you, the homeowner, stay in the country where you bought property? Like, will you need a visa or "green card" to be able to stay longer than is allowed for tourists?

We were thinking about the same thing, but came to the conclusion that we might be better off renting a home for long periods, rather than buying.

For one thing, we are a long time off from retiring, and for another, we would rather spend time between the US and different places in Europe. If my kids get married and have children, I wouldn't want to be an absent grandma :-( We have that going on right now in the family, where one side of the grandparents do not know the kids that well.

Also, I would want to spend time in Spain, in Portugal, Italy, France, and even the Greek isles. Maybe (my dream), we can rent for several months in a different country each year. Then we don't have to think about upkeep, or what happens if one of us were to become very ill etc. Lots to think about.

Haven't done it, but have thought about it many times. A couple years ago I came across a slick pamphlet that discussed buying property overseas. I think it was produced in Ireland, but I can't find it to verify. Regardless, I remember some of the cautions. First and foremost, hire an attorney (in the country where you are buying). Realtors and title agents do not perform the same duties that they do here, or have the same legal obligations. Also, do your own due diligence, which will mean spending time locally to dig into the background and status of your potential purchase. Also, in Ireland, be aware that they have a stamp tax on home purchases, which can run as high as 9% of the purchase price.

Be sure to check out each country's rules regarding length of stay for non-citizens (if you are a non-citizen of that country). Ireland, like other Schengen countries, ordinarily limits you to 90 days out of any 180 day period.

Good luck! It can be an involved process, but one that might be well worth it.

FOUND IT! The "slick pamphlet" is called "Buying Overseas Property Safely" and is published by the Association of International Property Professionals. Website is www.aipp.ie. A good intro to the dos and donts of buying such property.

Thanks for the advice and links. Overcoming the extended visa requirements is not a huge deal for us since we wouldn't be able to stay for more than 90 days at a time for the foreseeable future and we do have a few possibilities on ways to get extended visas.

Normally, I wouldn't consider buying a home somewhere we visited on holiday but we do have some strong ties to the area and we will be spending more and more time there

Would you consider trading your current home with European travelers? intervac.com is a website for home trades and many of the homeowners are looking for people willing to housesit for longer periods of time. We have traded our home twice (once for a trip to San Francisco and once to France). Both were excellent experiences. I'm happy to provide my experiences to anyone interested.
DeAnn at pgc@redrock.net

Actually, regarding the Visa issues, they would not be as difficult as one may think. Particularly if you are a landowner and have proof of income (not there to work) and insurance coverage, many countries are glad to issue you a longer term or resident Visa so you can stay and contribute to the economy (spend your money). Certainly it takes some time and effort to go through the Visa process, but so does buying a house. I would suggest going down both paths at the same time, so you are fully aware of any hang-ups.