Purchasing any property is a major economic commitment and requires research to ensure that your decision is based on sound financial grounds. Sam Funnell from Fine & Country Rugby gives a few tips on what to consider when buying a holiday home.
The reason for buying a holiday home is the most important consideration before making a purchase as it is not just the initial financial outlay that needs to be taken into account when buying a holiday home – running and maintenance costs can be significant and need to be factored in when making your decision.
Are you looking for a rental investment or a property for your own use? You may be looking for a property that is suitable for mixed use, bringing in a rental income but also being available for yourself and friends. You may even be searching for a future retirement property. Deciding the most important objective for you is the first step in your research, as this will affect your choice of location and the style of property.
If you are buying a weekend getaway for yourself and your family, access will be important in your choice of location. Being familiar with an area and knowing what it offers helps to narrow your choice, but make sure you look into transportation systems in the area. It is much easier to get to and from your holiday home if there is a train station or an airport nearby. This will also have an effect how easy the property is to let, if you are considering generating extra income.
The proximity to shops, restaurants and bars has an impact on the pool of potential renters, too, and therefore occupancy rates. If you are looking for a possible retirement option, access to medical services, such as hospitals, dentists and pharmacies, is important. Also consider whether the area has a low season, when shops and restaurants close down. Seasonal holiday dwellings can impact your cash flow and make your ability to afford ongoing expenses difficult
In the holiday home lettings market, look at the local competition to assess the potential income. If it is a popular area where the market can be crowded, ensure you have a unique selling point. This might be facilities such as a swimming pool or a tennis court, or again, the proximity to a town or a beach that will appeal to prospective holidaymakers.
Holiday properties are often highly priced due to the perception that they are situated in a desirable location. Other options, such as timeshares or joint ownership with friends or family offer a way to reduce costs or enter the market at a higher level. While this may not provide the same capital gain level as a rental investment, sharing a property can provide a reduction in maintenance costs.
The fundamental principle in buying a holiday home is research. Thorough research will help you choose the right property for you.
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