A Galway doctor has warned his colleagues over the pitfalls of investment in foreign property. “You’d want to be mad to invest in schemes abroad,” is the advice of Dr Willie O’Connor. “GPs are not good business people at the best of times. Dealing with lease documents in English is bad enough but trying to read them in French which has a different legal system using Google Translate is a nightmare,” he told Irish Medical News.
Dr O’Connor has a charge against him in the District Court Castlebar taken by French bank Societe Generale relating to a mortgage he took out to purchase an investment property at Les Jardines de St Benoit in a village called San Laurent de la Cabrerise.
He is one of a number of Irish GPs among hundreds of investors who have been badly stung by a French VAT-back tourism investment which was popular around 2007. Dr O’Connor who describes himself as a “solo country GP” in Galway feels the fact that he was busy and his accountant was seriously ill in 2007 were factors in making the disastrous €300,000 investment.
“What is really disturbing is that I received financial advice from Financial Engineering Network in Galway who told me this would result in the best return on my savings,” Dr O’Connor said. Financial Engineering Network went out of business a few years after Dr O’Connor made the investment in 2007. “I entered into the transaction purely as an investment. There was no intention to use it as a holiday home. We are modest people,” he added.
“My advice to other GPs considering investments outside Ireland is to spend the money on yourselves,” he said. In the past ten years of the investment there have been many disappointments for Dr O’Connor and the other investors. “We are forever paying out on charges for water and rates to the local commune (county council) and management charges of one kind or another to the company managing the property. I am also now paying income tax to the French authorities,” he explained. At the time of the investment in 2007 he was assured that there would be small deficit between the rent and the mortgage costs so there would be no tax liability in France.
“As a country GP, I work very hard and try to help people and this bad investment arose when we tried to use our disposable income to plan for the future. Any GP considering a foreign investment should talk to me first about the pitfalls” he says. Hundreds of Irish and British investors who bought into the same St Benoit tourism complex have engaged a French lawyer to take the issue of mis-selling to the European Commission. MEP Brian Hayes has raised the issue in Brussels under Consumer Protection rules.
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