There are so many people that dream of owning their own holiday home, but is it worth investing in a home that you will rarely use?
In the past, only the very affluent could afford a holiday home abroad as they can justify the expense thanks to having a large surplus of cash available. Bankers, traders, successful business owners, and so on.
That said, in popular tourist and beach destinations property markets are booming from sales to UK citizens in Britain despite the gloomy economy and BREXIT issues.
How Are So Many People Able to Invest in a Holiday Home?
There are a few notable ways in which the average joe can own his/her own holiday home with the right business sense and financial backup.
Owning a holiday home can usually only be justified if you already own your own home in your native country. You can use your current house/apartment as collateral for a mortgage to purchase a property overseas or you can take out a second mortgage on your home if the amount covers purchasing a second home abroad.
In Asia, you can pick up a 3-bedroom house near the beach for as little as £50,000 to £100,000. If your home the UK, for example, is worth £300,000, and you are 75% of the way into your mortgage, then re-mortgaging and paying off the holiday home on one lump sum payment could be an option. There are also some cases in which people plan on one day moving to their holiday home, then taking out a mortgage for holiday home while still paying rent on their home in their native country.
These low prices for property are also the same in Italy and the Spanish property market still has low costs holiday homes after its crash, but properties in Spain are back on the increase. If this continues, then anyone that has purchased a holiday home in Spain will be seeing up to a 10% gain on the value of their property.
The Issue Of Expenses That Come With Owning a Holiday Home
The only issue with all the scenarios above is that the holiday home is going to be empty the majority of the year. That is unless you are your own boss and able to take time off whenever you choose, or you have obscenely long holidays. For example, an oil rig worker or ships first officer will have 5 weeks working and 5 weeks off, or 6 months working and 6 months and so on. Teachers also have long holidays.
For the majority of us, our holiday home is going to be left empty for 11 to 10 months of the year. That means paying any bills on the place while not using it. This could be maintenance fees, mandatory house tax, and other local taxes, a small electric bill each month, and quite possibly fees to a property management company. Lest we forget the furniture that will fade or age over time and need replacing even though it has hardly been used.
All these fees will come on top of any mortgage that you have taken out to purchase your holiday home. That is unless you are lucky enough to have purchased the place outright.
How Can the Expenses Associate with Owning A Holiday Be Covered?
One of the reasons there are so many people able to own their own holiday home is because they are using vacation rental websites to become hosts. They either use something like the Lodgify vacation rental website builder or they use a website like Airbnb where they can list their property or both. Using both is the better option because having your own branded website that shows off your vacation rental will help you get more bookings.
You simply list your holiday home on the vacation rental websites and use the website builder to take bookings directly. Most of the time people that book through a vacation rental website want to come back to your holiday home in the future. In this case, all you would do is show them your website where they can make repeat bookings. The website builder is so easy to use and requires no web coding knowledge.
Simply drag and drop pictures and write a description of your property and the website’s advanced system will organise all your holiday home data into a mobile and desktop friendly view. Anyone that visits the website will believe that it was built by a professional web design agency.
Vacation Rentals Can Create An Income From Your Holiday Home
The idea here is to take advantage of a booming holiday home rental marketplace. Rather than booking hotels, people are now using vacation rental websites to book their own private holiday homes or apartments. Much of the time people can get a better rate for a short-term rental of 1 week to 3 months by renting a holiday home compared to paying for a full serviced hotel room. And let’s face it, when it comes to going on holiday with the family, saving on accommodation is an important factor.
It means that people that own a holiday home can become hosts; while, those going holiday can get a better deal for their accommodation.
If you have a mortgage on the property, then the vacation rentals should cover his or a good percentage of the mortgage. In most cases, people that have planned and set up their mini holiday home rental business will make a profit or cover all expenses and the mortgage on top. It is for this reason that the number of people buying homes overseas has increased. Thanks to Lodgify and sites like Airbnb, people can now gain an income without the need to hire a property management company.