There are many factors to consider before buying a holiday home. The first is location. You'll want to choose a place that is convenient for you to get to and that you enjoy spending time in. The second is cost. You'll need to be able to afford the mortgage payments, insurance, and upkeep of the property. Finally, you'll need to decide if you're going to rent it out or use it as a personal getaway. Consider all of these factors carefully before making your decision.
🔑Affordability
Calculate the cost of the property you're considering and see how much money you will need to have available for a deposit and how much you will need to pay in monthly payments. Also consider other financial factors, such as:
✔️Will the holiday home be an additional burden on your budget?
✔️Will you be able to afford to maintain the property annually?
✔️Will you be able to afford to pay utility bills and taxes associated with the property?
✔️Will you use it yourself?
If you're considering buying a holiday home solely for investment purposes, then you should give some thought to whether you will actually spend any time there. If you won't, then you need to consider the difficulty in getting tenants, the cost of advertising, and the difficulty in maintaining a vacant property.
🔑Consider personal and professional factors
If you will use the property yourself, then consider how much you'll enjoy being in that location. Would you get bored after a few days away? Would the location be conducive to getting away from it all or would you be tempted to answer emails and pay attention to your phone? If you plan to rent out your holiday home, then consider the market in that location. Is there a demand for holiday homes that can be seen by an agent or are there plenty of available properties that are unoccupied? An agent can help you determine these factors.
🔑Location, location, location
If you will be using your holiday home yourself, then you need to make sure it's in a desirable and convenient location. The ideal situation is to buy near family and friends so that you can spend time together and the resident can benefit from your support and company. If the property is for investment purposes, then you need to consider the location in relation to major centres of population. The nearer the property is to these centres, the more likely it will be let out quickly and at a good price.
🔑Condition
Purchase a holiday home that you can be proud of – not one that needs extensive repairs. Before you buy, get an independent report on the condition of the property. You should also consider the maintenance and running costs of a holiday home. For example, will it require any special maintenance because of the location or type of property? Will there be any additional or unexpected running costs? You might also like to consider whether there will be any additional taxes imposed on the property.
🔑Features
Consider whether the property has any features that could increase its value or appeal, such as a built-in swimming pool or beautiful views.
🔑Sale process
The sale process for a second home can be much quicker than for a residential property so this could be an attractive feature. However, although the process may be quicker, don't rush into buying a property just because you can secure a mortgage easily. Try to insulate yourself from the real estate agent's enthusiasm for the property and ensure you thoroughly check the property over before putting an offer forward.
🔑Fee structures
Consider whether there are any fees associated with owning and using the second home. For example, will you be charged for membership at a golf club or for the use of a marina? Will you need to pay management fees for looking after the property when you're not there?
🔑To sum up
Consider all of the above factors before making the decision to purchase a second home. It is not enough to simply consider the cost of the property in isolation. A property that is poorly chosen can end up being a poor investment that doesn't meet your goals and needs. Although it may seem complicated, consulting an experienced property manager before buying will ensure you have made a wise investment that will increase in value and cash in on your holiday dreams now and in the future.