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Updated almost 6 years ago,
Perspective on buying a flat by leveraging investments overseas
Hello everyone!
I live in Spain on a rental property. Currently considering if it's worth buying a flat here by leveraging my property and investments overseas. Some extra information:
Variables:
- Brazil: 70,000BRL savings + 350,000 flat (currently on sale. Could make 2,000/mo 0.5% in rental)
— Scenario #1 Sale. Invest 420,000BRL: Income ~800€
— Scenario #2 Rent Invest 70,000 + Rental money (130€+450€). Income 580€
- Interest/Investments BR: Around 10-12% a year for investments.
- Interest/Mortgage ES: Money is cheap here - mortgage 2.5-4% a year.
- Downpayment/Mortgage Spain: ~32% (12% taxes + 20% downpayment), so 60,000€ (checking how this % can be lowered)
- Spain: Rent ~800-1000€/mo, Mortgage 600-700€/mo for a target flat price of 200,000€
- Exchange rate: 1 EUR = 4.35 BRL
My priorities:
- I’m an entrepreneur and love the freedom of it. Currently making enough money just to get by, not to save.
- I’m working on projects that, hopefully, will bring new streams of income in 1-2 years.
- I’m passionate about the idea of financial independence and the possibility it gives to work on my projects. However might consider getting a job to boost to my Spanish savings, if necessary.
- Mom is getting older. As the only-child we’re planning her move Spain so I can make sure she will enjoy her next 10 years ;) She has savings to start a loan here. We’re considering a shared property, with individual units (i.e. container homes - numbers not covered here, but would be way cheaper, like 70% less but checking local permits) or getting each one a flat.
- Not really comfortable with getting a 30 years mortgage as this could severely impact my freedom (my first flat was purchased 100% in cash, upfront). Loving the idea of house hacking to minimize that.
What would you do? Would be great to have some new perspectives on it. Suggestions greatly appreciated.
Thanks a lot!