Today we are going to discuss something which is not only looked upon as a great investment for SuperYacht crew but can also be the source of huge frustration and stress. This article is intended to give you, Superyacht Crew a general guide to the process you need to follow in order to avoid all the frustration and disappointment that can come as a result of doing things in the “wrong order”
We are seeing a lot of Crew approach us at the moment looking to buy property. Whether this is for investment, a future home or to consolidate your residential position property, is often viewed as a wise and secure form of investment. So, what do you need to know and do to ensure your property purchase does not go from a dream come true to a nightmare?
This guide does focus on UK crew but the general rules can be transferred to most other nationalities.
You are probably bored of hearing about it but, as I have said before everything revolves around tax. If you are UK crew and want to buy property in the UK you will need proof of income. The most reliable and widely accepted proof of income comes in the form of an SA302 form which is the result of filing an annual tax return. Therefore, to avoid disappointment, file your tax returns before you even think about buying a property. DO NOT, as many have in the past put an offer in on a property before you have an SA302 as there is a strong possibility that this will delay or even force you to pull out of your purchase.
Where y0u bank has a huge effect on how much you can borrow and the rate of interest you pay. When you apply for a mortgage in the UK, banking in the UK and getting paid monthly into that bank account will prove to be a huge benefit when it comes to discussing your borrowing needs. This will not only make you more visible but will help with your all important credit rating. UK banks like security which is completely understandable, especially when it comes to someone like you who works and spends most of their time offshore. Therefore the more links you have to the country you want to buy and borrow money in will be a huge help. And yes, before you say it there are banks in the UK that offer USD and EUR bank accounts.
Once you have taken care of the more difficult bits get some advice. Find out if you will be eligible for a mortgage and, if you are how much you will be able to borrow. This may seem like a perfectly sensible approach to most but there is absolutely no point in spending your time (or someone else’s) searching for a property, finding something you like and putting an offer in on it if you have no idea if you can actually fund the purchase. Get in touch with your mortgage advisor or us to find out where you stand.
Agreement in principle:
The next step is to talk to your mortgage advisor about going through the mortgage application process. Do this BEFORE looking for a house. You can go through the application process to where you get something known as a “decision in principle” from a lender. This means that most of the mortgage application is done and you will have a good idea of the outcome of an application before you complete paperwork. Your mortgage advisor will also be able to guide you at this stage as to a sensible figure to apply for. At this point, barring a change in a lender’s terms and conditions you are in a good position to start looking for a property. Remember also that if you are planning to rent the property out you MUST apply for buy to let mortgage. If the bank discovers you are renting a property out without a buy to let mortgage they are within their rights to foreclose or ask for their money back as a result. This could potentially mean you would lose your house and your investment.
Now you are in a good position to be able to search for a property and make an offer when you find what you are looking for. As Yacht crew you may not always have time to do this yourself due to time off and time in the country etc. Therefore if you need help with this get in touch with our property investment team who can help you with this.
Something else to remember is where you buy. A lot of us fall into the habit of buying in the area we grew up simply because we know the area. Don’t do this unless you are planning on living in the property at a later stage. The key to investing in property is buying somewhere which offers the best return on Investment or ROI, not buying something you like the look of. You are never going to live there and so remove emotions from this decision. Save that for the place you buy when you leave yachting, it will save you a fortune.
Also remember, buying in other countries can be a great idea but bear in mind that this can bring with it quite complicated and expensive tax implications. Whilst you are still working in Yachting treat all property as investments not as homes. This way you cannot easily be considered resident in a country if you own property there but do not live in it. In short, if you are UK yacht crew buy in the UK and rent your property out until it is time to leave the industry.
There are all sorts of other questions I am sure you may have but if you follow the steps above in the right order you will find the property purchase and mortgage process much more simple and far less frustrating and stressful.
Find out more at CREWFO.com and if you have any questions or need help with buying a property, finding a mortgage, or making sure you are in the right position tax-wise before you start get in touch.