Wednesday

A Second Home Abroad

Traditionally people buy a second home for a number of reasons; these often are investment, a home from home abroad, or as a quick profit maker. The latter, with property markets across the globe having plummeted in recent years, is perhaps less popular these days. However depending where you buy turning a reasonable profit is still possible and in the case of both of the former reasons to buy, there are still numerous advantages of buying property overseas.


Investing Strategies

As in investment, overseas property is not particularly different to buying investment property in the UK. There are three common advantages to investing in property. Firstly property can provide rental income, secondly it can increase in value over the long term and thirdly you can add value and sell quickly at a profit. Again, the latter is less likely these days but in the right region, at the right price, it’s not impossible. Additionally, there is also the opportunity that a long term strategy will see your money increase. Those buying overseas property generally focus on holiday locations as the best for potential rent. The holiday market does offer higher weekly prices and in warmer parts of the globe year round holiday lettings can offer significant levels of income. However, if you are investing in overseas property as income producing investment only, you may also consider long term lets and residential lettings. In Eastern Europe and some cities in Germany, where property rental not ownership is the norm, this can be a lucrative approach to overseas investment.

Mixed Reasoning

Many overseas property investors are investing for more than simple financial gain. The main advantage of overseas property purchases is often a mixture of lifestyle and financial benefits. Owning a home from home but one in the sun rather than the less balmy UK is often the biggest draw. Letting the property out when you aren’t using it will offer a welcome additional extra income and can, in many cases, mean that your home from home pays its own way. For most people the benefits of second homeownership abroad – or even at home – are obvious. Far preferable than crowded hotels, you can create a space that you feel fully at home in. Although a house purchase cannot be compared to a week in a hotel in terms of cost, over the long term – 20 or more years – it can offer considerable savings. Like villa rental, the whole space is yours and you can choose the home and location that best suits you, additional guests, friends and family don’t come with additional bills – other than perhaps a little extra on the food bill. In addition, for those who have the time, holidays don’t have to be limited to two weeks in an expensive hotel or rented villa.


Booking Issues

The late availability issue for those owning holiday homes abroad, that they also rent out, is one important thing to consider. Popular holiday homes may be great financially but you may find you can’t actually book time in for yourself! If you let and stay in your property you’ll need to make the decision early on as to whether you intend to use an agent to manage lettings. This can have huge advantages, especially if you use a local agent. They can provide a full booking service, cleaning, maintenance and offer local contact points for guest. However, for each of these services there will be a fee and you’ll need to add local taxes, bills and overseas property insurance to the final total of bites out of the apple. Managing your property yourself will mean more work and you’ll still need local help in the form of cleaning and maintenance. However, when letting through agents you’ll often find that you are limited to the amount of free weeks you are able to use the property yourself. Most will allow owner use for a number of weeks, but during additional ones you’ll pay a fee – usually the amount equivalent to the agent’s commission for the weeks in question.

Future Profits

Whatever route you choose and however you manage your overseas property, you’ll find that owning a home from home has a huge number of benefits. Carefully planning which reason to buy in will also help you to make the most that the sluggish property market has to offer in terms of bargain buys and this can also ensure that future gains are of the profitable kind.

Article contributed by Charlotte Rivington who loves blogging about her travels whilst she is on her adventures, covering a range of luxurious topics to her travel experiences.

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