Struggling overseas property owners forced to walk away from investments
STRETCHED owners of overseas properties are walking away from their investments because they cannot afford to meet repayments, a foreign investment expert has revealed.
Many of these people re-mortgaged their homes in Ireland to put down deposits on properties abroad.
Now that the apartments are nearing completion and they are being asked to pay the full amount, they are unable to raise the funds.
Foreign property lawyer Tom McGrath said his firm was now inundated with queries from people in financial trouble.
Irish people who bought in Bulgaria in the past few years were suffering the most. He said a huge number of builders there were in financial difficulty and they were not refunding deposits to Irish investors.
"We are aware of hundreds of people, but it probably runs to thousands of people, who are just walking away from a foreign property because they cannot afford to pay for it."
The Dublin-based lawyer said that most of the problems stemmed from the fact that the Irish-based sellers of foreign properties were unregulated.
Former seller of overseas property John Mulligan said thousands of investors were sucked into buying overseas properties on the promise of getting guaranteed rents for two years. But this tends to be a scam as the guarantee is built into the price you pay. The builder would up the price and pay it back to you over two to three years and call it a rental guarantee, he said.
Mr Mulligan, who has written a book entitled 'No Place In The Sun' about unscrupulous villa sellers in Bulgaria, said buyers typically remortgaged their home to fund an overseas buy.
He estimates that between 50,000 and 100,000 Irish people bought properties in Bulgaria between 2000 and 2008. Mr Mulligan said people had typically paid €120,000 for apartments that were worth €40,000.
"They thought the rents would pay the mortgage for the first few years, but there were no rents. And now these people are in financial difficulties."
Other foreign climes where Irish investors got burned include Dubai, Turkey, Portugal and Spain.