Many people every year decide to buy their own holiday home abroad, and as well as being the perfect holiday destination for life, it can also be an excellent investment. With the UK being so well known for its rain and cold, it is no surprise that thousands of Brits choose to buy properties in other far-flung areas of the world.
However, the process of purchasing a holiday home abroad isn’t always easy and making such a large investment in a foreign country can be risky and complicated. This guide looks into finding your dream holiday home to funding your purchase and everything in between.
How to choose the perfect holiday home abroad?
When you seek out the perfect spot for your holidays, you will find yourself back there year after year. If this is the case, then the chances are you already know exactly where you want to buy your new holiday home abroad, but if you aren’t sure on location yet, there are a few things to consider.
When considering where to buy your holiday home, you should think about the local property prices, currency exchange rates, local amenities, language barriers and travel options. Different countries will have different taxes and costs involved in buying property as well, so be sure to find out about all of this before choosing your destination.
Once you have chosen your holiday destination, you can start to look for your dream holiday home. With today’s technology, it could not be easier to search for holiday homes abroad from the comfort of your own home, so begin your search online to find some homes that meet your requirements. Once you have a few in mind and have spoken with some a few local estate agents, plan a trip to view the potential properties in person. This way, you can get a real feel for the place, and decide if any of them are right for you.
When choosing your perfect holiday home, think about who might be using the property throughout the year. Are you going to rent it out while you are not there? If so, look for properties with desirable features such as a pool in hot climates, or ample bedrooms for large families to stay.
How to finance a holiday home?
Once you know where you want to buy your dream holiday home, you need to work out exactly how you are going to be paying for it. You might be buying the home from savings or inheritance, in which case you might be in a position to purchase the property outright. If you are a cash buyer, it could put you in a stronger position to negotiate a good price for the home.
Be sure to use a reputable solicitor for the purchase, as they can help you to ensure you are paying all the relevant taxes and fees for the property.
If you do not have the funds available to buy the property outright, then you will need to get a mortgage. Some British lenders may offer overseas mortgages which can be used to purchase a holiday home abroad, but they are slightly uncommon as many banks see overseas properties as a bigger risk. A lot of UK lenders will only offer overseas mortgages for buying properties in countries where they have offices.
Another option is to get a mortgage from an overseas lender to purchase your new holiday home. It can be worthwhile seeking help from a broker that specialises in overseas mortgages. They will be able to give you invaluable information on how buying a home abroad works, and the ins and outs of foreign mortgages.
If you do get a mortgage from an overseas lender, then make sure you are fully aware of how it will be affected by exchange rates. Your lender is required to inform you if the exchange rate fluctuates more than 20%, and if so they must offer you the choice to repay in a different currency instead.
Foreign property markets are often very different to here in the UK, and depending on where you buy a holiday home, the property market might be poor which can make it very difficult to sell the home on. Be sure to have some kind of exit strategy in place just in case you do want to sell the property in the future.