Do you have a favorite destination? A place that you would love to visit time and time again? Perhaps you could do without the costs of staying in a hotel room or resort, and instead, have a place of your own that you can use whenever you want? You could have your own private place in your favorite spot in the world, but before you invest in a luxury overseas property, you need to make sure that you’re ready for it.
Get your money ready
When it comes to the notion of buying any second home, be it domestically over overseas, then you need to make sure that you’re taking the necessary steps to get yourself prepared financially. For instance, most people aren’t going to be able to buy a vacation home outright, meaning that they will have to rely on credit. As such, be sure to check your credit report and score and get rid of any incorrect black marks on your record. Have a sizeable amount of cash to serve as the downpayment on the home loan, and take time considering the different loans you could get, as well as what the additional costs of living are going to be. You should also consider how your plans for investment may work with this, but we’ll take a closer look at that next.
Why are you buying it?
Another very practical concern is thinking about what you’re going to be doing with the property in the first place. Are you going to just use it when you’re in the area? Are you going to run it as a short-term rental for other vacationers? Are you going to fix-and-flip it? Or are you going to eventually move there for your retirement? How you use a home dictates not only what it can offer as an investment, but also the tax breaks that might be available to you so do your research carefully on the local tax rates and what you can do to manage them. If you’re buying it to rent it out on the market, be sure to partner with a local property management and housekeeping service to help while you’re not in the country.
Take your time on the market
Before you put down any offers or even consider taking a tour, be sure to look at the kind of properties you’re likely to see, their prices, and how the market fluctuates over time. Be open to buying the kind of property that’s most available, like a new condo instead of a house if the location is an urban center without too many houses. Look at prices from a variety of places, too. Don’t just look at property agencies that are designed for expatriates or holiday home investors, look at local listings as well to get an idea of what the overall market is like. You should never rush into buying a home overseas, anyway, as you need time to research the tax and legal implications, for instance.
Factor in the local weather
For one, you’re going to want to make sure you’re in the right location to get great weather simply because you want your vacation home to be as comfortable as possible. It’s also going to play a major role in how attractive your home is to tourists and guests, as well as the increasing value of the home. Furthermore, you need to understand factors of climate like storms, snow, or saltwater erosion and what protections and maintenance you may need to invest in, in order to protect the property over the long-term.
Make sure you’re really excited about the location
Unless your interests are purely financial, you should not be buying an overseas property unless you’re certain that you love the location it’s in enough to stay there often and for long stretches of time. You’re going to want to get your money’s worth out of the property, for instance, but if you jump the gun and buy before you really have a feel for the country or city that it’s in, you can find yourself with the most expensive cases of culture shock that you’re ever likely to suffer. Make sure you have plenty of trips to get a feel for the location before you settle.
Owning a vacation home can, indeed, be everything you dreamed about, but you have to make your choices carefully and know how they’re going to impact both your lifestyle and your finances. Hopefully, the points above have you asking the right questions and ending up with a second home that’s right for you.