Holiday home.....madness?

[Desperateannie1]

Hi, looking for others experiences and advice on buying a small flat as a holiday home. We've saved a sum to extend our own home ( no mortgage) but think we won't get the money back so plan B is to invest in small flat with half savings and take small mortgage. Not stealth boasting because maximum is two small homes although more than lots I know. We're talking max £250,000 if we sold home and anticipated holiday flat.

We've done the sums and can afford it, with monthly outgoings of council tax and bills. The advantages are it provides a bolt hole and we are going through emotionally hard times just now, we enjoy our money rather than it sit in a bank and our family would have the enjoyment too. The disadvantages are the fear it becomes a black hole for our savings and we made the decision at a time we might not be thinking straight. Hence the appeal to you. Thanks.

"We are going through emotionally hard times" - I think on that basis now isn't the time to spend a big chunk of money on property.

How about a holiday where you can relax and take your time thinking about your plans for the future? Whilst putting money in the bank isn't much of an investment now with interest rates so low at present, buying a small property when your life is unstable could be a big burden and a huge headache if you decide you need to sell for whatever reason.

Thanks for your thoughts What. You've echoed my fears, it's just I'm aware that I'm not a risk taker even in stable times! We can't take a holiday just now because we are in the thick of lots of hospital stuff but I think it's maybe all this that's making us consider being a little reckless.

Another consideration is that a holiday home can become just another place that you have to clean/maintain/pay bills on, and unless you can spend serious time there (maybe if you work term time only and don't have children of an age where they want to be with friends at weekends/holidays) then it can work out much more expensive per stay than one might think.

Ok, I can understand the wanting to be a bit reckless, I'm in a similar situation and just want to spoil myself and put myself first for once. How about a special night out, theatre, dinner and a hotel somewhere, really spoil yourselves and to hell with the cost, just for a day (or a weekend for extra recklessness!)? Maybe buy yourself a piece of jewellery as a memento. I'm trying to think of something that's a short term splash, something memorable that'll bring you together, rather than blow a load of money on something you may regret later on when things are more settled.

I've always thought a second home is just more responsibility. I would treat yourselves to a few hotel breaks a year. Or a cruise, or a safari. But that's just what I'd prefer.

Personally, unless you're planning to treat it as a business and rent it out, I'd be very, very wary. There are a lot of 2nd homes where I live, most get used a lot to start with, but it drops off very quickly. And you can see that the owners really do end up spending a lot of money.

However, a holiday rental where you reserve weeks for yourself might be a very different deal - more work, but possibly a good investment if you're careful and put the time in.

Thanks for all your thoughts..I'm thinking them all through.

A flat/ apartment will have a lot less maintenance than a house.
So at least you wouldn't be spending your time there trying to keep up with the jobs and gardening.

We manage holiday homes abroad. I wouldn't touch apartments with a barge pole. I've been ripped off by managing agents both in the UK and abroad and would never do it again. I have also known a lot of people spend most of their holidays doing maintenance and having a lot of stress.

If it's a self contained house in a nice area of the uk that you are only going to use yourself that might be a different story. My parents did that and bought a 2 bedroom cottage in Devon on your budget but they liked it so much they live in it full time now now.

I considered the idea myself recently following an inheritance and decided I didn't want the headache of two properties so I bought a boat instead.

Pax and Mrs thanks. It is a very small flat so definitely no gardening or much cleaning, definitely a lock the door and go and it is in a very desirable area. So the hope would be that it would be for our down time now, maybe at some point retiring there if we like it to live in and hoping the average property appreciation would at least match interest rates at the bank.

We had a second home for a few years. TBH it was a hassle; maintenance, cleaning, lugging clothes up and down the M3. Don't forget about council tax, fuel costs & capital gains.
A flat sounds easier than having to keep the garden up to scratch.

Some questions to ask ...

• how much time, realistically, are you going to spend there? It may seem likely that it will be a lot now, but as dc's get older (if you have them), will you still want to go to the same place all the time? Will it still be as practical to go (kids social lives have a habit of interfering with weekends as they get older).

• Beware of tying up so much money in a property that you feel obligated (or financially forced) to keep visiting even when you fancy somewhere different

• how easily could it be sold if necessary?

• how far away is it from your main home and if you aren't nearby, do you have someone who is, that can be there in an emergency or to do or oversee any maintenance/repairs?

• allow a reasonable cost per year on top of bills for maintenance and repairs and consider if this is manageable. Nothing worse than a place going to wrack and ruin (and losing value) because you can't afford the upkeep on it as well as main home.

• would you rent it out? If so, who would manage changeovers, cleaning and maintenance (do the sums still make it worthwhile?) and is there room to store your personal stuff?

All those are potential downsides but it can be lovely going to your own place that you know well and feel truly relaxed in...

We decided to do that. I was desperate to live near the sea but we couldn't move due to work. We were considering moving house but the next house up was £150k more and all we would gain was a box room.

So we bought a seaside flat for less than £150k, planned to rent it until the dc started school and then as we were no longer paying nursery we could afford to use it as a holiday home.

We rented it straight away for more than we expected. A year later we then moved house. No pay rises for years. I don't think we can ever afford to have it as a holiday home now, but it seems like a good investment at least.

You cant get a mortgage for a holiday home by the way. I would consider a caravan / chalet in a holiday park instead if I had some spare money.

When I bought a flat in a seaside town I didn't look into the maintenance agreement.

When I had to sell the place it transpired that none of the other owners had been paying their maintenance. For a quick sale I had to settle everyone else's debts. I had made enough profit on the place for that not to be a problem but I would have preferred not to and it's put me off apartments for life.

But it does work for a lot of people you just have to do a lot of research. The old location location location thing is a cliché but it's definitely true in these circumstances.

I agree about somewhere that's easy to get to as well. My parents had a 5 hour drive to theirs and I'm not surprised they gave up on the 10 hour round trips every weekend.

I'll be going to my holiday home this summer (again). I always open the front door with trepidation about what I might find. Leaks? Infestation? Maybe the neighbour has decided to take advantage of my absence by encroaching on my property again?

I'll be in luck if its only very dusty and needs a good airing. I'll spend the first day of the holiday opening it up, and trying to make sure we all have a clean bed to sleep in at night and the next one cleaning.

Then I'll make a list of maintenance jobs that need doing and either try to arrange plumbers, electricians etc to come and do the job before we go home again (not easy as its in a popular holiday destination so the hotels keep them busy unblocking loos etc).

Before I leave, I'll email myself a list of stuff that I need to remember to take there next year to make our stay more comfortable.

Then we'll spend the holiday revisiting the places we've already been many times, listening to those around us delight on how great it is (we thought so too once).

I hope we won't have an early flight because there will be several hours worth of work on the morning we leave clearing out the fridge, emptying the bins, dust sheeting everything and putting the bedding in the wash.

It seemed a good idea at the time, but now I wish I'd just spent my money on renting other people's villas. I wish we could have a holiday somewhere else for a change.

Do you want a property for investment or as an escape? If its the latter what about a camper van or small caravan? Then you can escape even of you just have a day or two. It won't be a financial investment but might suit a need to do something a bit reckless?

Var, that is something I hear frequently from our clients!

The ideal scenario-a holiday home in a place where it is a good rental proposition and you intend to use this, along with it being a place you know you love and fully intend to return to and enjoy regularly for years to come. The regular rent means you have housekeepers and an agent close by to deal with everything and the rent covers this. Also means you don't have to clean so thoroughly and do laundry before you leave. If you decide on a change of scene then you can rent it out and it's not a lost expense....

IMO if you are to really enjoy a true holiday home (just used by you) you need a lot of spare cash to make it truly pleasurable, to make it what you want, keep it well maintained and clean etc. Less so if you really get there most weekends (and you don't mind constant fridge management and food carting) so it's a second home and you treat it the same as your main one but still...

Oh woke up to lots of replies so thank you all for your thoughts. The thing I'm pleased about is that all the drawbacks you've pointed out we've already thought of them so that gives me a bit of confidence we are not being ridiculously reckless!
The flat is a couple of hours drive away and a very well regarded holiday spot by the sea. We go there a lot now. Our children are on their own two feet almost. But it would definitely be for personal use at the start anyway and we've done our figures on this scenario.
We've spoken to the bank and we can get a mortgage but we are keeping g half our savings as an in case. Worst case scenario and we have to sell , property goes quickly and we've worked out we'd take a 7.500 hit if in year one but break even in year two then profit year three@ 4% appreciation in propert prices. Location we are looking at the average appreciation is 6%.
Thanks for the heads up about maintenance clauses we will check that out.
Really appreciate hearing others experiences and opinions. Huge thank you .

Quite rightly lots of people have identified potential issues but you sound quite positive about it and wanted to share a positive experience. It's somewhat different to your circumstances but...my parents are now retired and split their time 50/50 between their holiday home abroad and their home in the UK. They never see a proper winter as a result and because they rent it out in the high season it pays for its self. They don't make a profit but it does break even across the whole year. Having spoken to my mum at length about it she thinks the key to their success with it has been....

1. They have bought in a place that they love and consider it as somewhere they like to live as their home not just where they go for holidays iyswim
2. They spend a good chunk of time there in one go so the maintenance that you have to do when you arrive/leave is a relatively small part of their time there.
3. They've bought in a place that other people also love and want to go on holiday too and rent it at a reasonable price.
4. They have a very good agent, this wasn't always the case and caused a lot of issues in their first year of ownership.

Good luck xx

When we lived in a flat the maintenance was over £1000 a year. Plus we always had to pay extra toward jobs. And this was 15 yes ago

What about a small investment in HPB or the like? PIL seem to enjoy it and they use it a lot as they have bought into it.

I come from the Yorkshire coast. My home town has seen what seems like everyone buy a 2nd home and.or holiday home.

First, is it just for you or are you going to rent it out?
If its just for you then you really need to be using alotto get your money's worth - 4+ months or do not bother. Most people I know who have bought holiday homes get pretty fed up with them a few a few crap summers. The repairs and maintenance is a total killer - one of my mates spend his holidays going to france to fix up their holiday rental so they could let it out as they could not afford to sell it.

I note you say its flat. Be careful - flats in blocks tend to come with service charges that ballloon rapidly.

If you are renting it out than you are in for a lot of work. How far away do you live? You will need to get a cleaner, which can take some doing in most places. You can expect to have to drop everything on a couple of Saturdays and go and do the change-over yourself. A drive of more than 1 hour will kill you. To be honest, I've looked at the finances of holiday homes and its just not possible to make money of a UK holiday home with a mortgage on it. The only successful holiday lets I know are those where someone has inherited a house - say, Grandma's - don't want to sell, memories and all that, and can afford to let it out at competive rates.

As a financial specualtion, UK holiday homes are a bad bet. In my experience, they rise as everyone buys them and then fall like a brick as everyone tries to sell them. A RM search of my home town shows a large number of 'successful holiday lets' for sale.

In short, if you have money to throw away then fine - get a holiday home.

Otherwise be very very careful.

If its within 2 hours drive from your main home you will use it. A. Lot.
It will be a lovely relaxing break for you.You will go away for the weekend an return refreshed.

Anything further distance wise will turn into a chore.