The UK schools are breaking up for the summer holidays this weekend. So as thousands of families head off to the sun, here we offer ten reasons why it can make good sense to come back with the deeds to a holiday home in your luggage (or at least, to have done some of the legwork and made a good start).
With British families heading off to the sunshine over the next couple of months, many will idly glance into foreign estate agent windows and find themselves wondering “what if?” and then “why not?”
There are some good reasons not to buy such an expensive object when you’re in that relaxed mode, far from home, feeling warm and happy (and you’ve possibly had an extra glass of wine with your lunch). However, there are also sensible reasons for buying a holiday home when you’re actually on holiday. Here are ten of them:
Buying on holiday. If not now, then when?
1. The “sniff test”
Property investor James Caan refers to the “sniff test” with a new location. You can see for yourself that it has an intrinsic appeal without needing to listen to any salesman’s patter. So why go all the way home, do more research and find yet more places? You could spend many months researching investment locations but if you have to persuade yourself about it it’s probably wrong. Gut feeling is also an investment tool too.
2. If you love it, so will other people
If you are so wowed by a location that you want to buy there, then people like you will probably feel the same when you want to sell. Investors talk a lot about exit strategy, and that’s yours right there.
3. The price of package holidays
Package holiday prices are up 20 to 25% in popular destinations like Greece and the Balearics this summer. You can expect to pay more than £1,000 per person per week for a family holiday in the sun. Meanwhile many apartments on the Mediterranean can be found for £50,000. And you’ll get plenty of holidays out of it.
4. You CAN have your cake and eat it
When you buy a holiday home you get the holiday every year but keep the home. It’s what you might call “cakeism”, or what the Portuguese would call having the sun shining on the threshing floor while it rains on the turnip field.
Apartments on South Beach, Miami. More tempting than a student pod in Huddersfield?
5. Hidden costs
You have already saved the price of going out to look at a location. The thousand or so pounds’ saving of time, flights, hotels and hire cars could add a percentage point or two to your ROI before you’ve even started. Why go all the way home, do more research and find yet more places?
6. You’re buying an appreciating asset (probably)
While there can be a fashion element to resorts, over the long term a prime location in an established resort will nearly always be a good investment. Unlike student property, local neighbourhoods or blocks of flats, there is a whole tourist industry based on keeping your location attractive and appealing – usually well-funded by government and a powerful lobby.
7. Historically, holiday lets are profitable
When you’re playing Monopoly in your holiday apartment, you probably won’t lose from putting homes and hotels on your acquisition. However, do be careful of new rules on rentals in popular destinations.
Let’s not pretend that this is really a spontaneous decision. You’ve always known you want a holiday home in the sun!
8. If not now, when?
Let’s not pretend that this is really a spontaneous decision. You’ve always known you want a holiday home in the sun, but the processes seem so complicated, and it’s hot, and you’re busy… so nothing happens, for year after year. Now you’re 90% of the way there, and you have the chance to shock yourself out of your inertia.
9. First impressions are deep and instinctive
Humans are emotional beings with a lot going on at a subconscious and instinctive level. If the fates decide that you love a holiday location at first sight, the chances are that you’ll love it forever.
10. Better exchange rates
Before you sign on the dotted line, remember to calculate the exchange rate. The good news is that you will get a much better rate than you are getting for your holiday cash! Call Smart Currency Exchange to discuss your needs, on +44 207 898 0541 from your holiday location abroad, or on 0808 163 0102 if in the UK. If you are in Spain, pop into one of their offices in the Costa Blanca or Costa del Sol.
For all the good reasons to buy abroad, you should of course be careful.
Do follow these three simple procedures:
- Ensure you are dealing with a reputable estate agent. Call the Property Guides Resource Team on +44 207 898 0549 for some recommendations
- Calculate the cost of repairs into your costs. Around 1.5% of the property value per year is a good rule of thumb, or around €1,875 for €125,000 property.
- Speak to a good lawyer. You can find one in all the biggest holiday locations via the Property Guides Resource Team, on +44 207 898 0549.