Imagine being able to own a second home in the sun that you can escape to whenever you like. It may seem like a luxury that only the rich can afford, but in actual fact owning a holiday home could be within your means. Buy abroad and you could take advantage of lower property prices. Meanwhile, to cover monthly mortgage payments, you could rent the home out to other guests. Charge enough and you could even make money out of your second home in the sun. Here are just some of the considerations to make when buying a holiday home.
Finding the perfect location
The location should ideally be somewhere that you’re familiar with. It could be a place that you’ve gone on holiday to numerous times before. Either way, you may want to stay in the area a few days to get a feel for it – there’s no point buying a holiday home somewhere that you don’t want to visit.
The location could have an impact on the cost. Certain factors may push the price up, whilst others could lower the price. Great sea views and attractions within walking distance can make a property expensive. By going inland and distancing yourself a little from attractions you could save a lot of money. Be wary of flood warnings and high crime rates – these factors can often bring the price of a home down, but it’s unlikely you’ll feel very relaxed knowing that these threats exist.
For those buying a holiday home in another country, be aware that there could be foreign property laws that you need to read up. You may need to hire a foreign conveyancer to handle the legal paperwork. You may also need to hire a translator if English isn’t the official language of that country, so that no important details are missed due to mistranslation.
If you’re going to be renting your home out to other holidaymakers, you may want to choose a location that’s got a tourist trade, or at the very least attracts professionals on business trips. This will ensure that your holiday home is always booked up when you’re not using it, helping you to pay off your mortgage. Try to also choose somewhere that’s relatively accessible. A quiet villa may attract holidaymakers looking for a peaceful escape, but you don’t want it to be so isolated that it takes lots of time and money to reach it.
Finding the right kind of property
The property has to be right for your needs. If you’ve got a large family or plan to go on holiday with friends, you may want to look into somewhere with lots of rooms. If people staying there may have mobility issues, then you may want to choose a place with no stairs so that it can be a relaxing place. Parking space may also be needed if you’re likely to be taking your car.
It’s worth hiring a surveyor before purchasing your property to check that there are no hidden repair costs around the corner. You may even want to hire a health and safety inspection to check that there are no hidden dangers such as dodgy wiring or asbestos in the walls.
You may want certain luxuries to come with your holiday home in order to make it more than just a second home. These luxuries could push the price up, which is something to consider. You may be able to save money on some luxuries by finding properties with shared services such as flat with access to a communal pool. Alternatively, you may be able to factor in the cost of adding these luxuries yourself such as buying a villa with a lot of land and building a pool. Just make sure that you can get the planning permission to add in these features.
Luxury features are important to consider if you’re going to be renting your property out to other guests. The bathroom should be fairly plush – you might want to buy a nice bathtub or a fit a power shower or even invest in underfloor heating. There will need to be enough storage space for belongings. A comfy bed is also a must as well as wifi access. Certain features can also attract guests to your property when advertised such as balconies, pools, hot tubs and fireplaces (in colder climates). Think about your ideal guest’s needs and incorporate these into your holiday home.
Turning your holiday home into an investment
Unless you’re able to pay off the mortgage on your own income, you’ll want to rent out your property to guests when you’re not there. Sites like Airbnb have made managing a holiday home easy. These sites not only advertise your property, but allow to make bookings and screen potential guests. That said, you’ll probably want to hire a property manager to keep on an eye on property, checking that it’s clean and in good condition after each guest has used it. Property managers may also be able to hand over and collect keys as well as attending to any guest queries.
As owner of the property, you do get to set your own rules such as allowing smoking and pets. You can also collect a deposit from guests that might be able to help pay for potential damage or cleaning if needed. Obviously you don’t want to set too many strict rules as this will deter guests.
Because these guests will be essentially funding your holiday home, you may have to prioritise their use over your own. This could mean not leaving too many personal items in the holiday home so that it feels more inviting to your guests. You might also want to book your stays out of season slightly so that you can take advantage of peak tourist times. Occasionally you may want to let close relations stay there for free – just don’t get carried away giving out free trips to distant family members and friends of friends, otherwise you won’t be making enough money to cover your holiday home’s costs.
Any profit you make on your holiday home may be taxable, so you may want to consider hiring an accountant to take care of your finances. You should also check that your mortgage covers holiday lets, as you may not be able to make a profit whilst owning a home on a normal mortgage.
See you next time!