How to choose a holiday home
From future-proofing, to rentability and running costs, our experts explore the key questions to ask when searching for a second home in the sun
Forget workaday considerations like commuter links and school catchment areas, buying a holiday home is a wholly more exciting prospect. How far to the beach? How big is the swimming pool? Where best for sundowners? These are the kinds of property dilemmas that we all dream of solving.
Although the endless possibilities often make finding the right property a lot harder. After all, a holiday home is no longer just a place to decamp for the summer; it’s a dual-season residence, a comfy co-primary home, potential refuge, a pension pot or prospective retirement pad. There is perhaps more to consider than you might think.
Buying with head and heart
Buying a holiday home is a lifestyle choice driven by sentiment and often nostalgia. Yet for many buyers, the dream sun-drenched escape has got to work a lot harder to justify its existence, says Mark Harvey, Knight Frank’s Head of International Residential. “Finding the ideal location is one thing – somewhere that will keep everyone entertained – but a property that is suitably configured for multi-generational holidays is another,” he says. That alone can be a pretty tall order, but a holiday home is also an asset: buyers should beware that purchase costs can vary widely between countries (and between regions, take Spain, for example), and second-home taxation is steadily becoming more punitive, not to mention the upkeep.
Pictured below: 3-bedroom villa for sale in Kamalame Cay, Bahamas. Guide price: $3,800,000
Covering costs
Double the houses, double the running costs. Amidst rising costs of living, how will your holiday home pay for itself? If rentability is key consider location, seasonality and climate: how will the yield stack up? Golf and mountain homes tend to provide more weeks than summer-only resorts. Before buying, check that a property can be legally rented out for short-term lets, with differences between individual villas (beware, Balearics buyers), local zones (Florida) or regional restrictions (the Swiss Alps). How will you manage rentals – would buying on a development or resort make sense? Energy efficiency can reduce costs considerably.
Future-proof your purchase
Accessibility is crucial. Drivability is increasingly popular for the carbon-footprint conscious or those anticipating flight disruptions, says Knight Frank’s Kate Everett-Allen, Head of International Research. “Buyers might consider areas of northwest France that are accessible by ferry (such as the Loire valley), or with a Eurostar connection like Paris.” For weekend homes, target areas within one hour of an airport and check flight routes and seasonal changes: can you fly there during the winter? Future-proofing also means anticipating changing needs. “If you plan to relocate permanently and transition from a second home to co-primary or permanent residence, does the area have the right amenities?” Kate adds.
Pictured below: 4 bedroom villa for sale in Port Andratx, Mallorca. Asking price: €11,200,000
Intelligent investment
Yes, you might buy with your heart but what about your home’s value as a long-term investment? Certain overseas markets offer more liquidity than others. According to The Wealth Report, France is the prime market with the most diverse range of buyer nationalities, insulating it from the vagaries of just one or two economies. Your long-term plan should include your ‘exit strategy’ too. Are you buying your place as a lifestyle asset to enjoy for five years, or is this a property they want to hold for 15 and sell for a profit? Looking for more value? Prime property in Estepona averages €5,000 per square metre vs Marbella’s €9,000. Likewise, your money goes much further in the Western Algarve at €6,000 per square metre versus the Central Algarve’s €15,000, suggests Kate. Consider local inheritance tax and succession laws.
What and how to buy?
Nobody wants to spend their holidays fixing up their home. Is a more modern property just more practical? The appeal of hassle-free homes on managed resorts is behind the popularity of branded residence schemes, says Mark Harvey. “If you want to decamp somewhere for August, these schemes are perfectly set up to host friends and family.” Italy offers great examples. Now that 90-day rule limits usage for British passport holders, using a rental pool makes sense too. Check visa and residency rules – are there any restrictions on non-resident buyers? Consider the most tax-efficient way to purchase a property.
