Buying A Holiday Home
Many people go on holiday and simply fall in love with the place they are visiting. Others go abroad yet miss that feeling of home comforts that comes with your own privacy and personal items around you. In these circumstances, many people choose to buy a holiday home, enabling them to have familiarity in a holiday setting and in some cases a nice rental income during the months they don’t require to be resident.
Benefits of Owning a Holiday Home
For many people who decide to invest in a holiday home, the financial benefits are often not as huge as someone actively buying investment properties. This is because you may not wish to rent it out during the time you’re not visiting, or perhaps the upkeep is simply too high due to maintenance fees and other property management fees. Even in these circumstances, for many, owning a holiday home has benefits other than financial and this is what makes them worthwhile. The lifestyle advantages to owning a holiday home can be extensive. Having a place to go to where all your home comforts are present is a very relaxing prospect for many, Owning a holiday home means that you’re always aware of what kind of accommodation you’re going to when you leave home. The all too common nightmare situation of arriving at your destination only to be greeted by poor accommodation is completely eradicated when you own a holiday home. You can be guaranteed a welcoming place to stay and have complete control over your own routine – from food to washing, it’s entirely up to you when you do things. If you own a holiday home in a particularly popular area, you’ll always be sure of obtaining accommodation when needed and will avoid overly inflated hotel and villa prices during the peak season.
Organising a Mortgage for your Holiday Home
There are a variety of options when it comes to obtaining a mortgage for your holiday home. First you need to decide where you are planning to get the mortgage. If you’re in the UK and your holiday home is also in the UK, this isn’t as much of an issue. If you’re in the UK and your holiday home is abroad, then you can decide whether to obtain your mortgage with a UK lender or a financial institution in the country where you hope to buy. Either way, shop around. There are huge differences in mortgages dependent on who you go to and you can make substantial savings by looking around for the best deal. If you have a large deposit to put down, this is a great bonus as it may mean you can avoid expensive mortgage insurance. Also, consider what kind of mortgage is going to be suitable for your investment. Many banks and lending institutions now offer a buy to let mortgage, a mortgage where you are buying a property to let out for part of the year. If you intend to do this with your holiday home, a buy to let mortgage may be the best type for you. A good way of buying a holiday home is to get an interest only mortgage and simply pay off the interest. This works best however if you do intend to sell on at some stage and hopefully recoup some of your initially investment through capital growth.
Deciding Whether to Let Out Your Home or Not
When you buy a holiday home, the temptation is there to simply leave it sitting empty so that it’s always available to you when you need it. If it’s fairly close to home, many people keep their holiday homes empty and travel to it when they have the opportunity. If it’s abroad, some will take the chance to nip over to their holiday abode when they can afford it, or when they expect good weather. Either way, when you first buy a holiday home, you need to decide if you’re going to rent it out or simply keep it for yourself. If you want to help pay off some of the mortgage, it’s a good idea to rent out your property when you don’t need to use it. If you don’t make your holiday home available for rent for some of each year, you won’t be able to claim back any interest on the mortgage loan as a tax deduction and therefore you could find it proves to be very expensive. The best solution is to decide when you intend to use it and rent it out for the rest of the time. Actively market your property on your own so that you can claim it back as a tax deduction. Alternatively, you can get a letting agent to deal with it on your behalf.
