As with any big investment there are many aspects to consider when purchasing a vacation home wherever it is located in the world.
Pros:
A holiday home is an asset which will hopefully increase in value in years to come (with perhaps the exception of static caravans and mobile homes).
You and your family will be able to enjoy many a trip to your vacation home and will gather a wealth of happy memories over your years of ownership.
You can eventually choose to leave it as a legacy to your loved ones.
You may also decide to rent out your holiday home when not using it yourself and will find you can enjoy a healthy profit on the venture or at very least break even.
Cons:
Are you prepared to tie up your money for the foreseeable future if you are purchasing the property outright?
Are you able to afford the mortgage payments if the property is purchased with finance?
Is it really a bargain? Nowadays many off-plan new-build vacation homes are sold under the premise that year round rentals are guaranteed but if you buy one with no such guarantee in place are you certain you will be able to rent it to holiday makers on a regular basis?
If mortgage payments are reliant on rental income you will have to be very careful in your choice of vacation rental with regards to location and surrounding infrastructure.
Realistically speaking, the season may be a lot shorter than property sales representatives lead you to believe in their sales ploys. For instance a holiday home in the Canary Islands can be a ‘Nice little earner’ with year round lettings an absolute certainty due to the year round temperate climate but other locations may not be so favourably placed. Most Mediterranean countries will enjoy a May to October season so you must consider that your property might be standing empty for the greater part of the year – but you will still need to pay the bills when they arrive.
What about that new airport which the sales reps swear will open soon? Hopes and promises often do not materialise and tourists won’t come if the routes are non-existent and the location inaccessible, however golden the sands.
You must factor in all costs and maintenance fees and insurance costs; if your vacation home is within daily travelling distance of your own home and is to be used as a weekend retreat then you will most likely not need a management agency but if it is at the other end of the country or abroad you will have to pay quite a substantial amount in upkeep of not only the property itself but any communal areas, shared gardens and pools.
If the property is to be let then you will also need to take into account cleaning and changeover costs and repairs to fixtures and fittings plus frequent overhauls or replacement of high usage items such as air-conditioning units.
You will need to keep proper records of income and expenditure and declare any profits made from letting the vacation home on any tax returns you may receive.
In conclusion, buying a vacation rental home is not therefore a venture to be taken lightly or on a whim but if you are given the correct advice and are aware of the possible pitfalls it can prove lucrative from a holiday lettings point of view and fulfilling in regards to your own personal enjoyment of the property.
There are many internet property portals which offer a vast selection of vacation homes available throughout the world. Browse on rightmove overseas property and see which ones appeal to you.