You are considering buying a dedicated vacation home, but might also want to let it out to cover expenses. This guest blog is from Property Venture® an award-winning, overseas, real estate agency, offers some advice on what to consider before doing this.
1. What is most important to get right?
When buying a vacation or holiday home, which you might want to let out, it is worth considering, who else might find it an attractive place to stay. Who exactly is the type of vacationer or holiday-maker you want to attract?
Is it the standard family of four? If so then ensuring the outside area is practical and can be sectioned off for small children, so the pool doesn’t become a hazard, ought to be a priority. What’s more, there can be strict regulations about this in many countries, which may require extra expenditure before you can let out a property.
2. What makes a good Vacation or Holiday Let property?
Most people going on holiday want to be in close proximity to amenities, the beach, restaurant, bars, with lots of activities for the kids. So whilst a remote farmhouse cottage might seem dreamy to you, it could be more niche when it comes to successfully letting out your home and you are likely to face dwindling returns.
What’s more, if you buy a run-of-the-mill two-bed apartment on a huge development, where lots of others are renting out their holiday homes, then you are going to need a serious point of difference to make it stand out from the crowd. If you don’t, then you could face regular rental period voids.
3. What makes a good Vacation or Holiday Let location?
Coastal locations are always good, or near main cities. So in Spain the Costa del Sol is usually a good bet, near main conurbations like Marbella, or on the Costa Blanca, places like Altea, Denia and Javea have long been favourites for British, German and Scandinavian buyers, so it is possible to appeal to a broader group of holiday-letters.
4. Returns on a Holiday let can differ by country.
In places like Turkey, which has become increasingly popular as a tourist destination, bigger villas tend to be in short supply in certain destinations, so these tend to rent out quicker and at a decent price. Given the cost of living is lower, running costs are reasonable, so enabling decent net returns.
5. What type of Vacation home?
It isn't always about sun, sea and sand. Take somewhere like Krakow, Poland, which is hugely popular as a city-centre break, given its history, culture, arts and entertainment. Culture-vultures could not choose a better place as a base from which to explore parts of Europe, cost-effectively.
Cities like Barcelona are perennial favourites to a whole host of different nationalities, because of accessibility by air, high-speed rail links and sea. Its architectural heritage, and relaxed lifestyle act as a magnet.
If it is about the seaside, then consider coasts where the temperatures are higher, longer and have lots of amenities like Golf, which can help extend the holiday rental period from March through to October.
6. How can I reduce the effort I have to spend letting it out?
Vacation or holiday letting tends to require more effort than a standard buy-to-let property, due, in part, to a higher turnover of renters for shorter periods of time. So it is worth bearing in mind, looking after the vacationers you attract will go a long way to reducing effort. Repeat vacationers or holiday makers, is less effort than attracting a first-time holiday-maker.
7. Allocate time
If you want to maximise holiday rental returns, it is wise to think through the effort you might need to put in, even if you have an agent on the ground to look after the property and check people in and out. Certainly in the early stages to get an established rental pattern.