Most people think that traveling is the best way to escape life’s stresses and strains and monotonous bleeps, but we disagree. The best way to escape these little niggles is to have a holiday home. It’s having that home away from home, one you can make totally and utterly yours. It’s having that little slice of paradise in some faraway hotspot, where you have friends, know the local restaurant owners and know how to make your journey there so hassle-free it puts your morning commute to shame. It’s being able to run off to somewhere totally different and yet perfectly familiar. It’s the ultimate in luxury living.
But for all the blissful living you get to sit back and soak up, there are still some super-duper-important considerations you need to take into account before you pull out your purse, pop your name on the dotted line and snap up a property to use as a holiday home.
That’s why we have pulled together this list. It’s to help you make holiday-home-buying even less stressful than your last grocery shop. Trust us, when it comes to purchasing a second-home abroad, nothing is worse than making the wrong decision. Thankfully, this guide should make it a think of the past.
1. Location Really Is Everything
Forget what little details you are craving; the most valuable factor to think about - and then think about a whole lot more - is the location. It’s where all good things stem from. It’s where you will get the most joy when it comes to your every vacation and where you will get the most returns should you decide to let your property out when you’re not there. That doesn’t just mean choosing the right country or region either, it means where the established markets are, where the tourist hotspots are, how far it is away from basic provisions and lovely restaurants and what the plot offers, whether that be a pool, a beach walk or a cityscape.
2. Deposits Need To Be Big
There is no denying that you will get more bang for your buck in an overseas property than you would be buying into an establish metropolia like a New York or London. But that doesn’t mean you can escape handing over a large sum of money as a down payment. Yeah. You’re still going to need to have a nice dollop of cash tucked away somewhere. Of course, how much you need will all depend on the country you’re looking at. Take Spain as a prime example of a country where 30% deposits are not uncommon. So, know where you’re buying and then know what’s expected of you.
3. Think Future Currency Rates
Unfortunately, buying a holiday home isn’t the same as buying a bag of salted cashews from Lidl in that it can take months to finally get the keys to a property. This makes it pretty hard to predict what the currency rate is going to do because, if the last couple of years are anything to go by, currencies can drop 15 percent in the wake of political headlines. That can make your property a whole lot more expensive than you thought. Don’t worry, there is a simple solution to this and it’s called a forward currency contract. It’s a super-simple agreement that every reliable broker will offer and basically lets you buy a foreign currency at a fixed rate.
4. Do Tons And Tons Of Research
The moment you think you’ve found your dream home, make sure you reign in your emotions, put your optimism to the bottom of the pile and start doing all the in-depth research you can because, trust us, it’s the smaller print and finer details that can really sting you. If you are buying somewhere far off and exotic like the South Pacific, you might want to read this article at https://www.rumah.com/panduan-dan-referensi/mengurus-sertifikat-tanah/ingin-mengubah-sertifikat-hak-guna-bangunan-menjadi-sertifikat-hak-milik-ini-caranya to understand the different building rights and how to get a certificate of property, while buying in France can come with all sorts of odd caveats and laws that mean you never actually own your home, which is why you need to do your research. Make sure the vendor definitely owns the deeds, make sure there are deeds, do a thorough structural review and bring in a legal team. Anything that will help you rest well at night. Oh, and speak to other expats that have bought in the area to see if they had any issues when picking up a hot property.
5. Taxes Play A Big Role
One of the biggest factors that always seem to wangle its way out of the calculations is the tax. Don’t make this mistake. It could cripple your dreams if you do. It might be that you are buying in a country where property taxes are relatively insignificant. However, you might be wanting to buy a holiday home in France and that means you’ll be expected to pay around 7.5% of the property’s value in taxes and fees. If these seem a lot, it is, but it’s made up of a property 5% transfer tax (think stamp duty), as well as solicitors fees, which can be as much as 3% of the property’s value. Whatever your budget, it’s a large chunk of change to overlook.
6. Independent Advice Only, Please
When you’re sat in the estate agents office and wondering where you’re going to get your mortgage-slash-legal advice from before you sign on the dotted line, don’t be tempted to use one that has been suggested to you by the agents. Instead, go with a regulated lawyer or advisor that speaks both languages fluently. Getting good advice is sooooo important when it comes to the purchase of a property, so don’t risk it with an unlicensed lawyer an impartial advisor. Our advice would be: whatever procedures you went through when buying your home at home, stick to them this time around too. That means using independent lawyers, getting independent valuations, enjoying independent mortgage advice and anything else that you feel is necessary. The reason for this is simple: by cutting corners, you have everything to lose and nothing to be gained. Schimples.
This is a contributed post.