Buying a second home abroad.
A French or Spanish holiday is one of the quickest and easiest ways to unwind after long few months at work. A week relaxing on the beach is just what the doctor ordered, so it is time to dig out those forgotten sunglasses, mentally prepare yourself for the sight of a cloudless sky, and go to Boots to buy this remarkable cosmetic known as sun-cream.
However, if you are planning to have these holidays in a property you have bought to be your exotic second home, we are afraid you will have to be slightly more prepared than that. Perhaps you are deciding whether to take the leap of faith and go for it and are not sure what to expect? We have compiled a list of the main advantages and disadvantages to owning a second home in a different country.
- Diversification – There is always the chance that the value of your real estate will decline, but if you have divided your money between properties within different markets and economies, you will minimise the chance of this becoming a major problem.
- Passive Income – Another home which you will not be using as much as your primary property offers the chance for another string of income. By renting the house, it will provide consistent money from rent. For this route to work, you do not even need to be in the country to stay on top of the property details – you can hire property management who will collect and then send the rent on to your primary address, as well as basic maintenance of the property. (Although, since you are still responsible for the house and therefore anyone inside it, it might be a good idea to make a few visits throughout the year, just to check in and keep on top of any issues.)
- Free Holiday Destination – Of course, if you ever want to get away for a sunny week, you have a home to go to. Searching for vacant rooms in hotels is aggravating enough, but then you have to fork out the cash for it and encounter the awkward, “Hello, welcome back,” from the receptionist every time you return from an activity. Using your own home would be far easier, cheaper and more private.
- Area Expert – After numerous holidays in your own holiday home, and after years of renting it out to others while giving them advice on the area and where to visit, you will become an expert in the local area. You will know the best restaurants, coastal walks, bird-spotting spots and the quietest beaches.
- Responsibility – You have a duty to keep the house safe and hygeneic, especially if you are renting it out. If you are living in the UK and relying on property management, you might find yourself feeling as though you are in the dark about your own property and missing the hands-on approach. If you are the type of person who takes their responsibilities seriously, then you have to really think about what you would be letting yourself in for.
- Serious Financial Investment – Ok, so let’s ignore the initial cost of the property for a moment. Once you own it, you will then have to pay for any renovations or deep cleanings that need doing, find a way to pay bills when no one is renting off you and pay for its upkeep. Oh, and then there is the wages of your property management team. Yes, it is a scary amount of money, but if you think you could take it on, we are sure you will soon be making profits.
- Habitual Holidays – If you have a holiday home in another country, you will find yourself using it for every weekend break work allows. This may seem handy at first, but you might soon find yourself yawning when you arrive from the ferry crossing. This will especially become a problem if you but the house when you have pre-teen children who will grow bored of the same location after a few years, around the same time that they become hormonal and rebellious. Yeah…sounds like a nightmare, doesn’t it?
- Second Home Saturation – Thinking about the area where you have bought your property, consider the impact you are having on the locals. If you have bought a second home there because of the gorgeous weather and the tourist-y spots, then the likelihood is that someone else will have done too. With so many second-homes being concentrated in holiday locations, you are having a hand in depriving the locals of housing.
We hope this list of advantages and disadvantages has given you more of an idea on what to expect with owning a second home abroad. If you have any further queries, we would love for you to get in touch, since we are expanding our market into Spanish properties. We shall also soon be posting another blog about abroad properties, regarding how to do it in the smoothest and safest way possible, so why not sign up for our newsletter and we will let you know when it is posted?