Trying to talk some sense into my fiance. I already own a home in the US, which was $150k (less than 3x my income). She is British and wants to buy a home in SE England for about $300k (about 7x her income). She has 150k in savings, which she would invest almost completely into the property, and wants to take out a $150k loan. She currently lives rent-free with her parents.
This seems like a particularly bad idea because:
A) In general, buying a home at 7x gross income (2.5 to 3x is the max recommended rate in the US) seems pretty damn high when looking at her income alone
B) She would be completely undiversified (she has no stocks or other investments, just the cash) and all of her assets would be locked into the house
C) Two people on a combined income of about 100k should have no business owning $450k worth of house
D) The property taxes and upkeep on her place would eat her alive
E) SE UK market seems pretty overheated right now, especially with the problems that Asian and Russian investors, big drivers in this market, might face as well as the slowing global economy
F) My current job is not particularly secure and I have already warned her that I would not contribute to this investment, would not help her out if things go south, and would reconsider our potential marriage if she decides to go forward with it due to the tax implications (I am a US citizen) and the fact that I do not want to be over-leveraged.
G) She is considering looking at leasehold properties...
>Yes, but she wants to live in it.
Thats fucking consumption.
So you basically want to own two homes, betting on history of rising prices to continue??
Implying real estate will go up further, how could times possibly get better?
Btw. what would be the Bull case on general UK real estate?
But why? I'm both an Australian & Irish citizen with a US Greencard, married to a USC, and I file taxes... but I have no idea why you think it complicates things... keep the UK dealings in the UK, keep the US dealings in the US... declare the UK earnings in your US filing, but claim the foreign income exemption and also the UK/USA tax treaty...
>would reconsider our potential marriage if she decides to go forward with it
Jesus you're a pussy
Tell her in no uncertain terms you're not marrying her if she does.
Why is your fiancée living in England anyway OP?
the #1 reason for divorce is financial difficulties. If this woman is going to be throwing you into financial problems like huge amounts of debt, things are probably going to end very badly down the road.
>A) In general, buying a home at 7x gross income (2.5 to 3x is the max recommended rate in the US) seems pretty damn high when looking at her income alone
it is the mortgage you'd be worried about - seems like it is 3.5 times her income and she has a 50% deposit... that is standard
>D) The property taxes and upkeep on her place would eat her alive
no they won't, property taxes are in fixed bands in the UK based on the historical value of the property - it is called council tax and even if you live in a mansion it will only be circa 2-3k... mine is around 1k for a flat in London
your GF only has a $300k budget so £206K in GBP... she won't get much more than a 1 bedroom flat for that
>Op still hasn't explained why he's marrying someone on a different continent
We met when I was studying. Been together nearly 11 years now. Other than this stupid real estate idea, the relationship is great.
stocks wont hedge real estate that's for sure. even cash is better. take a fixed rate loan, have cash or some asset that does not correlate with stocks or real estate. if the market goes down buy more apartments with the cash
Same way they are in other world class cities: only rich people move in.
They're called "world class" because they bring in the best from over the world. The children of London households don't need to afford London home prices, London has plenty of interested parties from the top 1% of every nation on Earth willing to move in.
london is different they had basically 99% of new home owners foreigners. now that they wont sell anymore to foreigners (by law) they are moving to other capitals
Why the fuck do you have to marry her for?
Fucking americuck retards. If you like her, stay with her. Wanna move together? Move together. Want kids? Have kids. Want to marry? Don't fucking marry you fucking retard.
You haven't married after 11 years. She lives on a different continent and wants to financially indenture you. You might even sign away your sovereignty with a marriage. Your relationship may be stable but its because youre an excellent cuck. Find a local girl to cuck you. This situation offers you nearly nothing in return for three significant risk factors.
I'll say it again, if you want to cuck yourself this hard at least do it locally without overleveraging
>implying moving in and having children before marriage is a good thing.
How about you don't move in together & don't have kids so you can accumulate as much wealth as possible before deciding you're financial stable enough to have an upper-middle class life.