If you are looking to buy a holiday home, there are a number of considerations starting with: where is the best place to buy?
What are your long term plans for your holiday home?
Are you planning to use it as a holiday let as well as a place for you and your family to enjoy a holiday?
Or, are you planning to eventually use your holiday home as a place to retire to?
The answer to this will help you decide where you buy – either in the UK or overseas. Some people love the idea of retiring somewhere abroad, while others prefer to stay closer to their family in their own country.
So, if you are planning to retire to your holiday home, where you buy it is a major factor.
Are you planning to visit your holiday home at weekends?
If you are planning to use your holiday home regularly, such as for weekends away, you may want to choose a destination that doesn’t take you too long to get to – otherwise your weekend jaunts will be marred by a lot of travel.
Can guests get to your holiday let easily?
Will your second home be purely for use by yourselves or will you be letting it to paying guests? If so, check that where you are planning to buy has excellent transport links, so that it fairly easy for any guests to get to the property.
What is your budget?
Now you have decided whereabouts you want to live, you need to consider your budget. Remember that it isn’t just the purchase price, but, solicitors and surveyor’s fees, as well as potentially stamp duty etc.
All take in to account the ongoing running costs such as maintaining the property, mortgage payments insurance and so on.
Note that when buying homes overseas, typically extra costs may be involved that you don’t have when buying a UK property, so make sure you fully understand what these are – and that you can afford them.
If your property is going to be financed in part or whole by a mortgage, make sure that you get the mortgage that is appropriate for what you plan to use the property for.
If it is purely as a second home, the mortgage type will be different to if you are also using the property as holiday let.
Getting the ‘wrong’ mortgage type (e.g. getting a residential mortgage for a property that is being used as a holiday let) could see you being charged with fraud as well as potentially being made to pay back the outstanding mortgage amount in one go.
Is it fit for purpose?
When choosing your property, bear in mind its primary use – as a second home for you and family, or a holiday let. If the latter, you may need to make sure that your potential second home ticks a lot of the boxes for what a potential guest would want.
If it doesn’t, you may have difficulty in letting it.
Once the purchase of your second home is underway, it is a good idea to research your insurance options.
If you are buying abroad, while an overseas buildings insurance policy may appear cheaper than a UK purchased, there are a lot of things to note:
- language difficulties when reading the small print could cause confusion over the level and elements of cover you have;
- fluctuations in the exchange rate could mean that the monthly insurance premium may not be fixed, so you are never able to budget efficiently;
- swimming pools are typically only insurable if they are built to certain specifications in some countries – or not at all
- a policy bought from an overseas provider will be covered by the law of the country where your property is – not UK Law.
So while buying a UK holiday home insurance policy may work out a bit more expensive, you can have the peace of mind that you have the cover you need, at a fixed cost, and which is governed by UK Law.
Are you going to let your second home?
If yes, then you need to ensure that you have the correct type of guest house insurance. Standard holiday home insurance may not cover you for having paying guests at your property and the extra risks that may arise.
Do check with your insurance provider that any paying guests are covered under your policy and that you have an adequate amount of liability insurance (to protect you against the financial costs associated with claims for loss, damage or injury caused to someone while on your premises).
You can find out more about our range of holiday home insurance policies here.
If you are going to let your second home, you need to think about whether you are going to manage the advertising of your property, take bookings, and manage the tenants etc.
Howe you decide will depend primarily on where your property is – if it is at the either end of the country or overseas, dealing with tenants will be impossible, so you will need to consider the services of a holiday lets agency.
They can also do the advertising too, so it is all very “hands-off” for you.
Alternatively, if you are planning to make a proper business out of your holiday let and it is nearby, you may wish to oversee everything yourself – the advertising, maintaining and managing the tenants and so on.
There is a lot to think about when you do buy a second home, but if you take in to account all the pointers mentioned above, you may find owning a place in the sun (even if it is in rainy Great Britain!) can be a rewarding experience.