Many of us dream of owning a second home abroad in the sun. When you need a break from the hustle and bustle of everyday life, you can jet off to your private escape to catch some rays, drink cocktails and take a dip in the pool. It could be a place to take the family and friends, or someone where to go with your partner for a romantic break without the kids. And there are no bookings required – you own it, and so you can go there whenever you like.
Sounds magical? I know what you’re thinking – ‘but, I’m not a millionaire!’. Owning a second home would require taking out a second mortgage, which most people on an average wage can’t afford. Only rich people buy holiday homes, right?
That’s where you’re wrong. A holiday home needn’t be an extravagant expense – it could in fact make you a profit.
It can be an investment
Whilst you’re not staying at your holiday home, you can make money from letting other people stay there. Holiday rentals are hugely popular amongst holidaymakers. It could earn you more profit than a buy-to-let property if you’re able to keep a steady flow of guests – you can charge more in holiday rates than you can in rent. Sites like AirBnB can be used to advertise your property and manage bookings. These sites even allow you to screen guests before they pay to avoid attracting the wrong people to your property.
You can hire a property manager
Someone will have to hand keys to guests, clean the property afterwards and keep on top of maintenance. Rather than having to catch constant flights over to do this yourself, you could pay a property manager to look after the place. This could be an official agency or one of the locals who you happen to know. You keep in constant correspondence with them via Skype and even get them to give you a virtual tour of the property on their phone to check that its all in good condition. Your property manager should be someone you trust – it could be worth interviewing several people if you don’t know anyone in the area already.
Property prices abroad can be cheaper
Property prices abroad may be much cheaper, preventing your from having to fork out a huge down payment. New project launches may be slightly pricier, but are likely to require less maintenance. If you fancy a challenge, you could buy a cheap ‘as is’ property and spend lots of money doing it up. This might allow you to remodel the property to your vision. Property prices are much cheaper out of tourist hotspots, however be aware that you may struggle to get a steady stream of guests by buying in such an area. Ideally you want a property in an area which attracts outsiders all year round.
Focus on a certain type of guest
The type of guests best suited to your property may depend on various factors such as the location and the type of property. The location may be popular amongst holidaymakers or it may be more popular amongst travelling professionals. Something with multiple rooms might be ideal for attracting families, whilst a single bedroom property might be better for couples or solo travellers. Knowing your guest might allow you to furbish the property in a certain way too, or provide extra incentives. For a romantic lovenest, consider supplying a bottle of bubbly as a treat for each new guest and potentially adding in a hot tub if there’s space. Travelling professionals meanwhile may be more happy with the basics – good wi-fi and TV may be all they require.
You might want to do some renovations
To get more people interested in your property, you may want to make some renovations. One thing most guests look for in a holiday home is a luxury bathroom. A walk-in shower or new bathtub could be a nice touch. You could even go the extra mile and add in underfloor heating and a heated towel rack.
Also consider eco-vating your property. Solar panels might help reduce electricity bills for you (you’ll be paying these after all), whilst a greywater recycling system might reduce your water bill.
Be careful decorating the home to meet your personal preferences. Using certain bold colour schemes or cluttering the place up with personal ornaments might deter guests. It is your holiday home – but in order for it to appeal to other people, it can’t feel too personal.
You can still get your own use out of it
You can take holidays to your holiday home whenever you like with whoever you want. Whilst renting a holiday home may come with restrictions as to how many people you bring, owning a holiday home allows you to set your own rules.
Ideally, your guests should come as a priority as they will be paying your mortgage off. You may want to book personal holidays out of season. Alternatively, you may be able to book them last minute if you’ve been unable to fill the property for the week or have had a cancellation.
You can even allow other family members and friends to go on holiday there without you. Of course, be careful of letting them stay for free, as you won’t be earning the money needed to cover your mortgage.
You could even retire there
A holiday home can make a good place to retire to. Over the years, you’ll pay off the mortgage allowing you to then spend your retirement in the property mortgage-free. If your desires change and you decide you’d prefer not to spend your retirement in that property, you can always sell it – making you a large sum of money which could serve as a retirement fund or money to spend on a new property.
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