Holiday home overseas

[Marygold78]

We are considering purchasing a holiday home overseas, 2 ours flight, somewhere sunny and near the sea to go for long weekends and holidays; escape the hustle and bustle of London; we both have busy and demanding jobs.

I am looking for advice for people who have holidays home; what things do we need to consider? Is it a drain on your finances or do you make money from holiday rentals? Any advice would be greatly appreciated.

I think the golden visa/ passport for Portugal is about 280 for a doer upper in a low density area which many parts of the Algarve fall in to...

When the value of the pound dropped to almost 1€ in 2007 the British buyers stopped buying in France. This had the knock on effect of stopping many flights from the UK to smallet regional airports.

We were caught out as we had around £160k in the UK which would've been 240,000€ but became much less. Bang went the swimming pool in our rénovation 🙁

Yeah, it's not imminent, but that's why I asked about timeframe. Twenty years from now things will be very different, and leisure flying will probably be far less socially acceptable (barring major innovations in aviation energy, which I know are under intensive research!). We're just starting to see the beginning of it now though. It's the direction of travel (sorry for the pun).

My mum got a house in Crete and I warned her it might not ideal. They couldn't get there often enough as flights were £££ and we couldn't use it as they went when we could have gone. Shen didn't rent it out (her choice) but lost a lot of money on it and for what they spent, could have rented gorgeous villas with pools twice or three times a year at least. Plus other holidays.

We have a home in Spain. Apartment on a gated/secure community - so we can lock it up and know it's safe and secure even if we're not back for months. We bought it 10 years ago when the children were toddlers. It's been fantastic for us. Saves us a lot Vs friends paying many thousands of pounds in Summer school holidays. We go multiple times a year, and I've been with female friends for long weekend, husband has been on various golf trips. We have 2 local airports in UK and 2 local(ISH) airports in Spain. Plenty of flights all year round. We can usually hire cars out there fairly cheaply but would consider buying a car our there if we semi retire there/go for a month or two at a time. Annual airport parking in Spain is reasonable and plentiful. We don't have a Spanish mortgage (apartment is fully paid for). We send out about £250 per month which covers maintenance fees (gardening, building insurance, WiFi, security) and also pays for water and electricity. We pay circa €350 council tax a year, then a one off 'non resident' tax payment. We have only rented it out once or twice to family/friends but prefer not to (people never look after it the same as you do!) For us it has been a great buy, we've thoroughly had our money's worth and the area it is in is still very cheap to eat out/visit attractions, much cheaper than UK. You do need to consider location, airport access and then what is open/available all year round - some resorts and towns can be very quiet in Winter. If you do your research and go into it with your eyes open, it van be a fantastic thing to do. Good luck!

For what they spent, could have rented gorgeous villas with pools twice or three times a year at least. Plus other holidays.

This sums it up perfectly

Also depends on your long term plans.

The region where my parents are is currently in a severe drought. the local river, which usually flows through out winter and spring, hasn’t flowed at all this year. They are lucky that they are in the one small part of the region where refilling swimming pools is currently permitted. In other places, water is being delivered into villages as the levels are so low. This is only going to get worse.

I had a holiday flat in Nice years ago, but I lived in Paris at the time so would just get the train there. It was a nice place to have and I loved being by the sea. I rented it out to friends/friends of friends when I could. Once we moved to London I sold it though as I didn't want to fly that much and the train took too long for it to be worth going for long weekends + kids were at school so that was further limiting our time there.

I don't think I could be doing with a house, garden, pool etc as the maintenance would take the pleasure out of being there for me.

I would personally look at the Marbella or Nerja areas . Good for Malaga airport do all year round flights, good rental potential and plenty of others to make friends with- and agencies to help with rental cleaning etc- as well as decent weather in the winter. I love Mallorca too and same applies, although weather more variable in winter.

Buy somewhere you can lock and leave, decent service charges and that's on a well cared for development.

I fully agree with this, I have a holiday home in Spain in Almeria and long weeks really mean long eg arriving Thursday and leaving Monday at the earliest so 3 days annual leave so can't do that very often, the idea that you can fly over on a Friday and back on the Sunday evening are a myth

You will need to apply for a tourist license to rent it out even if you buy one with one they aren't always transferable.
You will need to employ someone to clean and prepare and let the renter's in

Since you have an EU passport, your husband can travel as the third country spouse of an EU citizen if he is travelling with you or in order to join you. The rules for this are less onerous than the straight 90 days in 180. There is a special section of guidance about it in the handbook issued by the EU to border guards.

Well worth looking into (I have an EU spouse).

@SeatonCarew this is very useful to know, do you have a link to understand this further please?

Thank you for the replies. We are planning to buy a flat, recently build ideally, not garden but a terrace/balcony and ideally in a complex with a pool; so there will be annual fees for the complex plus the normal bills.

Currently we use Airbnb's and spend thousands a year, we will still do a couple of Overseas holidays to different places but will be going to our holiday home more often.

@Marygold78

I live in the Algarve and it is fabulous, but as of a few months ago the Portuguese government has stopped issuing any new AL licences (the local lodging license you need to rent out your house, even on Airbnb). This may only be temporary, but it may not. They are also considering additional taxes for holiday lets, as they are trying to rebalance the housing market in favour of long term rentals for people who live here.

It's much more complicated than it was to set up a rental holiday home I'm afraid.

We have access to a relative's flat in a complex in Mallorca and it's ideal for what you've described. It's in a holiday area, so pretty dead in winter, but that doesn't worry anyone who wants to go off season and then head into Palma or do sight seeing rather than lie in the beach.

If you're tied into school holiday periods, then chances are the annual cost of a flat will be far less than booking hotels. The one we use costs ~£3.5k/ year to run.

Financially, yes you could get a lot of hotel stays for the purchase price of a property but you retain that investment.

In terms of how you use it... if you want to let it commercially, you'll need an agent on the ground who can fix issues and organise cleaning. It will cost, but it's do-able. You'll also need to get up to speed on rules and regs such as if you need to register as a business etc.

A half way option between full letting and just you using it would be letting friends and family use it and charge a nominal amount to cover utilities, cleaning and a bit on top rounded up. Lots of people do this in the complex we stay and I reckon most owners probably break even on their annual costs. You'll still need someone to clean but it wont cost as much as a managed let.

There is the downside as pp have said of always being tied to the same place, but we feel very lucky to be able to go to the place we do, because we simply could not afford the same quality of location in a hotel - for us it would be go there or stay in the UK.

Do you fully understand the taxation system in Portugal?
We have a branch there and it is very different.

I can't answer this for a couple of days, will need to get the reference from FH and visitors are just about to arrive for a couple of nights, but I promise I will. It's working well for us (second home in Spain). 😊

DH

We own in Spain, we have had some good times and it’s been trouble free.
However, if I thought I could sell it tomorrow without losing money I would

We really considered this, and were booked to go and view properties… and then lockdown happened. Tbh that totally put us off, we now have a holiday home in the U.K.

But of a maudlin addition to the thread but consider the long term - what if one of you gets very ill or dies (might be an easy answer eg sell it, but worth thinking about). Will you have elderly family back home you want to see? Also what might your ‘ideal’ with grown up children look like? Spending all winters there and others visit you? My dad always wants us to spend time with him at his holiday home, my siblings are ok with this - although one expects him to pay (!). I’m less enthusiastic.

We bought a holiday home in the Algarve many years ago for exactly the reasons you are considering. Fast forward and we now live in the Algarve (retired), be it in a different property. Really think I'd struggle with a UK Winter now. Have never regretted the original decision, it was life changing.

Thank-you so much - really kind of you! Enjoy your visitors! (sorry for the derail OP!)