5 Steps to Buying a Holiday Home
If you’re thinking of investing in a second property it can be tough to know where to start. Not only do you want to find the perfect building and setting but accessibility and other concerns such as future value will also come under scrutiny. Our five point guide will help you get your head around these choices and provide a basis for when you’re shopping around.
Why are you buying?
Your reasons for buying a holiday home or second home will have a great impact on your choice of location and property. If you are looking for a rental investment, you might have different priorities than if you are just looking for a retreat for your own use. If gaining capital is your main interest, then it's likely you will choose a different destination than if it were for a retirement pad. Many people want a second home to be 'mixed-use' i.e. they'd like to get a bit of rental income, but also use it for themselves and their friends and family. Of course if the value increases with time, this is also a bonus!! It can be difficult to find all of these elements in equal measures, so you will need to decide what is most important to you - it will make the process much simpler.
Where is the best place to buy a holiday home?
Look into transportation services to the area Access is one of the most important factors when considering where to buy a second home. If you want somewhere to escape at weekends, it might be a bad idea to buy in Australia. Devon, however might be more manageable! Look into transportation services to the area, think about the road and rail systems and whether low cost airlines operate in the area.
Where you buy will depend on what kind of surroundings you are looking for, consider the nightlife, food, scenery and so forth. And don't forget the weather - some places have good weather all year round, but some have low seasons where the shops and restaurants close down.
A technique to use is to narrow your search area by looking at "ever decreasing circles". Once you've decided on the country, you can begin to decide on the region, then the town, until you can pinpoint the specific location and concentrate your search there.
What should you look?
Write up a list of criteria that the property you are looking for should include. Is a garden essential? Do you need a garage? How many bedrooms? Do you want an apartment or house? Make sure you are clear on which items are non-negotiable and which you'd be willing to compromise on. Also, think about the style of property. You might like the idea of a stone-built rural farmhouse, but will it provide you with the rental income you desire? Perhaps the maintenance will be unmanageable?
When is the best time to buy a holiday home?
properties bought at the bottom of the market make the most profit
You can spend months looking at market conditions and predictions for maximising capital growth, but first and foremost, it has to be the right time for you. You might spend years waiting for the 'right time' to buy, and then realise you've missed the boat.
Many people either avoid buying in a downturn because of the uncertainty of their investment, or simply can't arrange the finance, but often the most competitively priced properties can be found at such times. It sounds obvious but historical data shows that properties bought at the bottom of the market make the most profit, so in a buyers market you have room to negotiate.
Next Steps...
So you've decided why, where, what and when but what about how?
For a major purchase like this you'll have to do a considerable amount of planning and budgeting in advance and research the options open to you.
As many of you will be first time buyers, take a look at our detailed guide outlining many of the things to look out for when trying to buy that dream home in the sun.
If you have ready cash, then speak to a currency expert who will be able to advise you on the getting the best deal at the best time.
If you're looking at a mortgage, think about whether you need a UK or international mortgage and the implications of this on your income and currency exchange rates. so that you know how much you have realistically got to spend, and can make you a more attractive buyer.
In all cases it is vital to speak to a legal advisor who can work in your best interests, and you can relax in the knowledge that you'll soon have a wonderful second home.
Make sure once you have completed the purchase of your property that you arrange the relevant insurance. Towergate Insurance offer quality Holiday Home Insurance for properties in both the UK and overseas.