Holiday Home advice needed

edited 30 November -1 at 1:00AM in House Buying, Renting & Selling
5 replies 1.2K views
MattLGMattLG Forumite
120 Posts
edited 30 November -1 at 1:00AM in House Buying, Renting & Selling
I'm currently looking into buying a holiday home abroad (or possibly several) but I could do with some advice. Naturally I'll be wanting to rent them out when I'm not using them in order to reduce the costs or even make a profit. Can anybody give any advice on how best to go about renting out holiday homes? Are there any good companies who can handle stuff like that for me? Are there any companies I should avoid?

Also, what's the best way to go about getting a mortgage? I've heard of specialist mortgages for buying property abroad but could I just get a standard UK mortgage or a local mortgage in the country of the holiday home? What's the best option?

Many thanks in advance.

MattLG

Replies

  • Ian_WIan_W Forumite
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    Part of the Furniture 1,000 Posts Photogenic
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    Difficult to answer the first part of your question for the reason outlined above!!

    We've owned for 8 years, but are currently in the process of selling, an apartment in the Canaries. It's been a great BTL [40-45 weeks rental each year], a great investment [180%+ capital growth] but most importantly a super holiday home for us and the family. Last part was our motive for buying, the rest, a HUGE bonus.

    With regards to mortgages - they are available locally, in Spain up to 80% LTV, however repayments are in Euros which depends on you earning letting income locally rather than in the UK. That + tranfer and exchange rate variations if you need to use UK funds to make mortgage repayments can be a problem.
    When we bought only Abbey International and RBS Gibralter were available for offshore mortgages but now most Banks and Building Societies do them. Advantage is that you borrow against overseas property, keeping your UK equity intact, but repay in Sterling. Downside, unless things have changed, they don't allow any anticipated rental income to count so your earnings have to be enough to cover UK and overseas mortgages.
    Final alternative, if you have enough equity, re-mortgage your UK home and release some.

    Hope that helpful. If ABROAD happens to be Spain, particularly Canaries, let me know and I'll post again. Otherwise it's someone else you need.
  • MattLGMattLG Forumite
    120 Posts
    Thanks for your info. It's definitely a useful start. I was thinking more about doing this in the new EU states where, I think, the properties are cheaper.

    MattLG
  • Robin00Robin00 Forumite
    56 Posts
    If anyone needs tips on getting your currency to fund property purchases & oversease mortgages, give me a shout. Doing your currency efficiently can save you thousands on the cost of the purchase! Basically, don't just assume your bank will give you the best exchange rate, they probably won't.

    This is equally important if you are selling up and converting back to sterling!
    No Unapproved or Personal links in signatures please - FT3
  • Ian_WIan_W Forumite
    3.8K Posts
    Part of the Furniture 1,000 Posts Photogenic
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    Sorry Robin, our sale is going through in Sterling, though if we had needed to convert from Euros I would certainly have used a company such as yours, as they are much better value than High Street Banks. Nice try, but No Cigar!!

    I don't have any experience of the countries you're thinking of, but watching some of the hype on TV it seems to me that there is an assumption that house/property prices will boom just because they join the EU. I would be very cautious of that assumption - it may be right, but I'm not convinced.

    I still think you still need foreign buyers and tourists to fuel and sustain a boom in previously cheap areas. So look for access to airports and perhaps areas the Tour Operators/low cost airlines are starting to expand into. Even then I would look on it as a medium to long term investment, which you might have to subsidize with your UK earnings, if you can't attract enough holiday lets to pay your running costs.

    A one bedroom part-ruined farm house in deepest "Trans-Siberia", 200 miles from the airport, with no local tourist attractions, might only cost you £5k, but that's because that's all it's worth to the low paid locals. Sure, joining the EU will attract funds to these countries for infastructure improvements, but it's only slowly going to iincrease local's spending power, so if foreigners are not attracted, I don't see how house prices will automatically boom.

    Turkey looks like a reasonable gamble as the prices are low, but EU membership isn't yet assured. Prices are already quite high in Cyprus and Malta but they certainly could go higher. So I'm not so sure where else you'd be looking? Bulgarian coast maybe? I'd certainly hesitate to go too far Inland as large parts of Spain, away from the Costas and Islands, are still relatively cheap - a generation after property development began in earnest.

    Anyway, best of luck with your search. Though we made our decision to buy for other reasons, it has certainly been the best INVESTMENT we've ever made.
  • MattLG wrote:
    I'm currently looking into buying a holiday home abroad (or possibly several) but I could do with some advice. Naturally I'll be wanting to rent them out when I'm not using them in order to reduce the costs or even make a profit. Can anybody give any advice on how best to go about renting out holiday homes? Are there any good companies who can handle stuff like that for me? Are there any companies I should avoid?

    Also, what's the best way to go about getting a mortgage? I've heard of specialist mortgages for buying property abroad but could I just get a standard UK mortgage or a local mortgage in the country of the holiday home? What's the best option?

    Many thanks in advance.

    MattLG
    try raising money on your own house - capital raising. I've just bought an apartment in Turkey - very cheap too.

    Boardguide note: edited to remove advertising
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