Buying a Holiday Home

scaredofdebt

Not sure if this is the right forum for this, so apologies if not.


I am hoping to retire in about 5 years time and one idea I have to make a bit of income is to buy a holiday home - but I realise there will be pros and cons.


The idea would be to buy somewhere quite modest, a small apartment etc, somewhere fairly cheap, possibly Spain and to take holidays there when we want and also rent it out when we are not using it.


Any advice greatfully received.


Thanks.

DunnersO

I think you need to weigh up the costs and risks of owning abroad against just renting, and be clear on your reasons for wanting to actually own a specific property.

I own an apartment in Perpignan in France. I’m quite lucky, as it’s centrally located and I’ve been able to rent it to tenants from the UK and US who teach at the local university and Conservatoire. Otherwise relying on the local rental market would probably have let me with more void periods or a greater risk of rent arrears and other issues.

But the lesson I learnt was that the buying process will be more expensive then you expect, as will be the cost of managing and renting your home while you’re back in the UK. You will also be dealing with unfamiliar tax and conveyance processes.

Having to deal with emergencies/tenant problems are stressful enough with a UK BTL property, but these are made worse when you’re not in the same country and do not have the local connections and knowledge to get things done. Even with a good letting agent/property manager, it is still stressful and expensive, which you may find you could do without.

Overall I just about break even. I do love my apartment, the location, and did buy it for the long term (I expect to use it more in about 10 years). But there is a strong argument that it would be easier and less stressful to just rent a place for a few weeks at a time in whatever location you choose. That way you don’t have to worry about maintenance, taxes and all the other mundanities that have a tendency to sap the joy out of the overall experience.

scaredofdebt

Thanks, good info, appreciate it. Funnnily enough Perpingnan is an area I am familiar with and would consider for a property, but probably just over the border in Spain, around Figueres/Roses.


I find France a bit expensive for food etc, compared to Spain.


We do own a BTL here in the UK so aware of the tenant issues etc but I can appreciate this is magnified with having lots of short-term tenants and the issues of distance and language etc.


Thanks again and good luck!

DunnersO

No problem - and good luck to you too. I know Figueres/Roses quite well, as we occasionally pop over the boarder to spend some time there. It's a nice area and that area of Cataluña and Southern France has its own character.

NoodleDoodleMan

We know people who have owned a Spanish property for decades.

Their mantra is always go through a reputable Spanish lawyer, avoid claims that a Notary appointed by the selling agent will suffice.

The first thing to establish is that the seller has undisputed legal ownership of the property - that sounds obvious but there have been cases where that aspect has caused issues.

budgetflyer

4 me. If you can't drive to it in an hour from home- don't buy it.
Better to buy somewhere close to home. Use the rental income to pay for nice holidays abroad

TELLIT01

I don't have any answers, but a number of questions to consider.


1. Do you plan to do short term holiday lets, or long term lets? From my vast experience from watching A Place in the Sun there would seem to be constraints on what can and can't be done in some areas.
2. Have you considered the costs of having the place managed? If the place itself is inexpensive is income not likely to be at the lower end of the price range. If so, won't much of the income be swallowed by the fees, particularly on short term holiday rentals.
3. Have you 'done the sums' on the benefit of simply renting when you go on holiday over the income/hassle ratio of owning abroad?

NoodleDoodleMan

Why not go over to your favoured part of the Costa Brava on a recce visit to investigate ?

I first visited Rosas when at primary school in 1958, there was only one small hotel.

Went back several times in early to mid 1960s as it grew - was acquainted with an architect/developer who showed us all the planned expansion.

A very different Spain in those days.

Not forgetting the recent appearance of the elephant in the room.

https://www.theolivepress.es/spain-news/2019/02/14/brexit-everything-british-expats-in-spain-need-to-know/

GoingonholidayI

I own a holiday home, an apartment in Mallorca. You said you were thinking of doing this for some income. I can pretty much guarantee that won't happen. You may be able to cover some costs if you are lucky!

Things to think about.....
Spain is cracking down on holiday lets, you need a licence in most parts of spain. That licence is costly. You need the licence to advertise!
You really need someone local to do changeovers, odd jobs etc.
Tax in spain is pretty harsh, for example you are taxed on income, you can't offset any costs for holiday lets as a non-resident.
Tax is payable quarterly for holiday lets and you'll need a gestoria or lawyer to file the forms.
You then have to declare any income to hmrc, unlikely to be any uk tax to pay as spain will have grabbed more than you thought possible!
You'll get hassle from your community or neighbours because your guests will likely be inconsiderate, even if they don't mean to be and you aren't there to sort it out!

I could go on! Having looked at it, I found its just not worth it. I'm in a popular spot and the going rate where I am is £1k per week in high season for a 2 bed apt, its still not worth it!

If you want a holiday home to enjoy yourself or for family go for it! It will change the way you holiday, its incredibly relaxing walking into a home from home!

Good luck

jimbo6977

Agree with GOH1.

If you want a holiday home, buy what you can afford without having to generate any revenue.

Maybe allow trustworthy friends etc use it in return for odd jobs or whatever.

The buying process in Spain is frought with ownership disputes. A good independent notary/solicitor will charge sky-high fees but you just have to swallow that. A cheap lawyer means even larger bills and potentially the loss of your property further down the line.

NoodleDoodleMan

The buying process in Spain is frought with ownership disputes.

Jimbo is absolutely correct.

You hear stories of property being punted for sale where the vendor does not have sole ownership rights.

For example, one half of a divorced/separated couple, without the consent of the other party.

That can turn into a big drama scenario.

I may be wrong on this, but I understand a buyer may be liable for any outstanding debts on the property after it is sold - unpaid equivalent of our Council Tax, or electricity etc.

Maybe even unpaid previous mortgages ?

Could be a minefield for the rookie buyer.

Also worth noting that the Estate Agency industry is not regulated as it is in the UK - and just about anybody can set themselves up in business.