Buying a holiday home. Is it possible?
Discussion
Apologies for the rather woolly/theoretical post but here goes....
We’re in our early-mid thirties. £200k mortgage. No kids and not gonna happen, so no one other than ourselves to worry about.
No savings at all as we’ve been repaying loans but once things are all paid off we will be earning c. 100k between us, bringing home around 5.5k p/m after paying 10% into pension and no debt other than mortgage (c. £750 pm)
We have got rather used to taking nice holidays and spend a good chunk of disposable income on this.
Our plan once totally free of debt was always to buy a nicer property in the UK and essentially stay there til we’re no longer bound to this part of the country due to work, then retire somewhere where you get more value for money house wise.
Lately we’ve been talking about the idea of staying put with a more modest home here and exploring the pipe dream of having our own bolt hole somewhere within 3-4hrs flight from UK.
I know absolutely nothing about how this would be financed or whether it’s remotely doable on our salaries, or wether it’s the reserve of the uber wealthy and I should stay in my lane...
Any pointers of where I might start digging into this half baked idea much appreciated!
We’re in our early-mid thirties. £200k mortgage. No kids and not gonna happen, so no one other than ourselves to worry about.
No savings at all as we’ve been repaying loans but once things are all paid off we will be earning c. 100k between us, bringing home around 5.5k p/m after paying 10% into pension and no debt other than mortgage (c. £750 pm)
We have got rather used to taking nice holidays and spend a good chunk of disposable income on this.
Our plan once totally free of debt was always to buy a nicer property in the UK and essentially stay there til we’re no longer bound to this part of the country due to work, then retire somewhere where you get more value for money house wise.
Lately we’ve been talking about the idea of staying put with a more modest home here and exploring the pipe dream of having our own bolt hole somewhere within 3-4hrs flight from UK.
I know absolutely nothing about how this would be financed or whether it’s remotely doable on our salaries, or wether it’s the reserve of the uber wealthy and I should stay in my lane...
Any pointers of where I might start digging into this half baked idea much appreciated!
Edited by OriginalFDM on Thursday 6th February 12:02
Muncher said:
I haven't done it, but would think that given the numbers you have posted it is easily doable, but you will likely need to remortgage to release enough deposit for the overseas property.
This was my first question...basically can we borrow more on a UK mortgage to finance the deposit of the 2nd property, in the same way that we would do if we were moving up the ladder in the UK. When you get to the point of considering where to buy abroad, make sure the transports links are rock solid. A friend bought a house in France, I've no idea where, but said it was lovely and house prices were reasonable. 2 years into their ownership and Ryanair stopped flying to their local airport. They can still get to their place, but it's significantly more awkward and weekends away are far more difficult.
OriginalFDM said:
This was my first question...basically can we borrow more on a UK mortgage to finance the deposit of the 2nd property, in the same way that we would do if we were moving up the ladder in the UK.
Just be careful the reasons you give the lender for a further advance. Most lenders will not allow a further advance to fund a second property purchase, but they will to fund an expensive car, home improvements etc. Illogical I know, but make sure you know what they will lend for before you ask, if you catch my drift.GT72 said:
When you get to the point of considering where to buy abroad, make sure the transports links are rock solid. A friend bought a house in France, I've no idea where, but said it was lovely and house prices were reasonable. 2 years into their ownership and Ryanair stopped flying to their local airport. They can still get to their place, but it's significantly more awkward and weekends away are far more difficult.
Yeah that was something I immediately thought. We’re both full time employed and will still want to do other holidays so will need to be easily accessible with at least a backup plan for if a carrier stops easy service!GT72 said:
When you get to the point of considering where to buy abroad, make sure the transports links are rock solid. A friend bought a house in France, I've no idea where, but said it was lovely and house prices were reasonable. 2 years into their ownership and Ryanair stopped flying to their local airport. They can still get to their place, but it's significantly more awkward and weekends away are far more difficult.
Agree with that entirely. My first criteria was being within short reach of a well serviced airport (preferably more than one airport) that ran a regular service, preferably with more than one airline. For the more popular destinations it’s more than likely the route will continue but if the transport link is severed, it would be a disaster.
Don’t know where you are looking but might be worth having a look at this thread with a few mortgage recommendations etc.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
OriginalFDM said:
Yeah that was something I immediately thought. We’re both full time employed and will still want to do other holidays so will need to be easily accessible with at least a backup plan for if a carrier stops easy service!
I’ve copied and pasted my own comments from the thread I linked to:-My main drawer, however, was the ease of "commute". For this plan to work for me required the journey back and forward to be simple - quick, cheap and without hassle. If that wasn't fulfilled, the house would have been an expensive, unused, white elephant IMO. Given this was my Lamborghini fund that I had promised I would buy myself this last year when I hit the big 40, I didn't want to put it into an unused house hehe My partner is a lecturer at university and so, whilst flexible, still has to be in work on a regular basis. I have less requirement to do so, but with life still UK based primarily, even social life dictates we have to be coming and going regularly.
With that in mind, my primary factor was working out the easiest commute I could find. AGP airport is still very good in that regard, and flights often cheaper than Alicante. However, the parts of the CDS that I could afford, and would want to live in, were an hour from AGP (or more). The flight was another 30 mins South. It's small amounts, but they add up.
In my case, my local airport in the UK is 20 mins away. Its a regional airport so tiny and a breeze to get through security in minutes. You can therefore leave less than an hour until the flight to arrive. Laptop out in the lounge, have a bite to eat and climb aboard. Less than 2.5 hours later I am landing in ALC and then I am about 20 mins drive the other end. In reverse its simple too - one benefit of Spain's airports is that only Barcelona and Madrid fly long haul, so even the larger regional airports are too bad to get through, certainly not outside of peak seasons.
It might seem odd that my primary focus was on an easy commute, but as I say, buying it when we both work (and are far from retirement ages) meant that I felt if it was an arse to get to, a few trips later and it would be out of favour and certainly with the Mrs if she was having to go back and forward every week or so due to her more on the ground work commitments.
From an emotive perspective it is good thing from a feel good sense but the financials can be a different matter.
You will have the costs on interest and capital repayments on the mortgage, the deposit, the estate agency fees and local taxes (these can be up to 10% of the purchase price) and then all the running costs, utility bills and ongoing maintenance costs.
These can seriously stack up each year and when you divide these by the number of weeks you actually use the place it can be far more cost effective to rent somewhere when you need it and let someone else deal with the hassle and costs.
Having said all that, a good mate of mine is currently in Nice buying furniture for a holiday home he completed on a couple of weeks ago and is absolutely thrilled with his decision!
It can be a head or heart thing, to be honest.
Good luck in whatever you decide to do.
You will have the costs on interest and capital repayments on the mortgage, the deposit, the estate agency fees and local taxes (these can be up to 10% of the purchase price) and then all the running costs, utility bills and ongoing maintenance costs.
These can seriously stack up each year and when you divide these by the number of weeks you actually use the place it can be far more cost effective to rent somewhere when you need it and let someone else deal with the hassle and costs.
Having said all that, a good mate of mine is currently in Nice buying furniture for a holiday home he completed on a couple of weeks ago and is absolutely thrilled with his decision!
It can be a head or heart thing, to be honest.
Good luck in whatever you decide to do.
I think Julian’s advice is pointing in the right direction. Do you want a holiday home or a good investment?
I think the CDS is effectively the Florida of Europe. If you want good all year round weather and places to go / things to do and plenty of choice in flights, it’s the obvious choice.
We were in the OPs position in 2000 and blowing lots of cash on holidays and so bought something down here, on the basis that we could enjoy some holidays, make some rental income and hopefully a capital gain. But when we retired in 2005 at age 54, it was no longer suitable. We sold having effectively doubled our money. It was cowboy-country at that time, so we avoided CGT.
We now rent a 2-bed penthouse for 3-months at a cost of just €4300 Incl electricity. Besides us, the owner manages only a few other weeks rental, so the dividend compared to ongoing costs are minimal. There are a couple of similar penthouses currently on the market for €700k. One we used to rent was sold in 2018 for €460,000. At that time, the market was buoyant - lots of Scandies hiding spare cash, but now the market seems as dead as 2009. Tax collection has sharpened-up massively, but I’m sure it’s as good a time as any to buy, providing you are a strong negotiator.
For most of the year - summer months- we live in France, but the notion of a capital appreciation on property there does not really exist outside of Paris - the Cote d’Azure and perhaps Toulouse.
I think the CDS is effectively the Florida of Europe. If you want good all year round weather and places to go / things to do and plenty of choice in flights, it’s the obvious choice.
We were in the OPs position in 2000 and blowing lots of cash on holidays and so bought something down here, on the basis that we could enjoy some holidays, make some rental income and hopefully a capital gain. But when we retired in 2005 at age 54, it was no longer suitable. We sold having effectively doubled our money. It was cowboy-country at that time, so we avoided CGT.
We now rent a 2-bed penthouse for 3-months at a cost of just €4300 Incl electricity. Besides us, the owner manages only a few other weeks rental, so the dividend compared to ongoing costs are minimal. There are a couple of similar penthouses currently on the market for €700k. One we used to rent was sold in 2018 for €460,000. At that time, the market was buoyant - lots of Scandies hiding spare cash, but now the market seems as dead as 2009. Tax collection has sharpened-up massively, but I’m sure it’s as good a time as any to buy, providing you are a strong negotiator.
For most of the year - summer months- we live in France, but the notion of a capital appreciation on property there does not really exist outside of Paris - the Cote d’Azure and perhaps Toulouse.
rdjohn said:
Do you want a holiday home or a good investment?
This is perhaps the difficult bit for me. Anything I want as a holiday home is going to be a poor investment. But also anything we buy as a holiday home is unlikely to be somewhere we'd want to keep for retirement in 30 years.Maybe there's a middle ground, but Escape to the Chateau has probably screwed up my best chance!
OriginalFDM said:
Apologies for the rather woolly/theoretical post but here goes....
We’re in our early-mid thirties. £200k mortgage. No kids and not gonna happen, so no one other than ourselves to worry about.
No savings at all as we’ve been repaying loans but once things are all paid off we will be earning c. 100k between us, bringing home around 5.5k p/m after paying 10% into pension and no debt other than mortgage (c. £750 pm)
We have got rather used to taking nice holidays and spend a good chunk of disposable income on this.
Our plan once totally free of debt was always to buy a nicer property in the UK and essentially stay there til we’re no longer bound to this part of the country due to work, then retire somewhere where you get more value for money house wise.
Lately we’ve been talking about the idea of staying put with a more modest home here and exploring the pipe dream of having our own bolt hole somewhere within 3-4hrs flight from UK.
I know absolutely nothing about how this would be financed or whether it’s remotely doable on our salaries, or wether it’s the reserve of the uber wealthy and I should stay in my lane...
Any pointers of where I might start digging into this half baked idea much appreciated!
When you go on your nice holidays is it to the same place every time?We’re in our early-mid thirties. £200k mortgage. No kids and not gonna happen, so no one other than ourselves to worry about.
No savings at all as we’ve been repaying loans but once things are all paid off we will be earning c. 100k between us, bringing home around 5.5k p/m after paying 10% into pension and no debt other than mortgage (c. £750 pm)
We have got rather used to taking nice holidays and spend a good chunk of disposable income on this.
Our plan once totally free of debt was always to buy a nicer property in the UK and essentially stay there til we’re no longer bound to this part of the country due to work, then retire somewhere where you get more value for money house wise.
Lately we’ve been talking about the idea of staying put with a more modest home here and exploring the pipe dream of having our own bolt hole somewhere within 3-4hrs flight from UK.
I know absolutely nothing about how this would be financed or whether it’s remotely doable on our salaries, or wether it’s the reserve of the uber wealthy and I should stay in my lane...
Any pointers of where I might start digging into this half baked idea much appreciated!
Edited by OriginalFDM on Thursday 6th February 12:02
OriginalFDM said:
GT72 said:
When you get to the point of considering where to buy abroad, make sure the transports links are rock solid. A friend bought a house in France, I've no idea where, but said it was lovely and house prices were reasonable. 2 years into their ownership and Ryanair stopped flying to their local airport. They can still get to their place, but it's significantly more awkward and weekends away are far more difficult.
Yeah that was something I immediately thought. We’re both full time employed and will still want to do other holidays so will need to be easily accessible with at least a backup plan for if a carrier stops easy service!The idea of a holiday home has always been internally vetoed in my head because:
1. Restriction - if you have a holiday home, you feel compelled to use it, which limits other holidays. Why pay to go to (X) when you're already paying for a house in (Y)??
But what if you get bored in (Y)??
2. Financials. A holiday home, to me, represents a highly risky investment. Putting that cash into a better UK home seems (rightly or wrongly) safer in the long term.
3. Everyone I know who has a holiday home, unless they're minted, spends at least some of their time there decorating, repairing, buying things, etc. This is not what I want to do on my holiday. If they rent it out, they spend time at home dealing with grief from renters.
I have long since (and quickly concluded) that I'll take my chances investing in the UK property market and hope to buy somewhere abroad on retirement.
Muzzer79 said:
OriginalFDM said:
GT72 said:
When you get to the point of considering where to buy abroad, make sure the transports links are rock solid. A friend bought a house in France, I've no idea where, but said it was lovely and house prices were reasonable. 2 years into their ownership and Ryanair stopped flying to their local airport. They can still get to their place, but it's significantly more awkward and weekends away are far more difficult.
Yeah that was something I immediately thought. We’re both full time employed and will still want to do other holidays so will need to be easily accessible with at least a backup plan for if a carrier stops easy service!The idea of a holiday home has always been internally vetoed in my head because:
1. Restriction - if you have a holiday home, you feel compelled to use it, which limits other holidays. Why pay to go to (X) when you're already paying for a house in (Y)??
But what if you get bored in (Y)??
2. Financials. A holiday home, to me, represents a highly risky investment. Putting that cash into a better UK home seems (rightly or wrongly) safer in the long term.
3. Everyone I know who has a holiday home, unless they're minted, spends at least some of their time there decorating, repairing, buying things, etc. This is not what I want to do on my holiday. If they rent it out, they spend time at home dealing with grief from renters.
I have long since (and quickly concluded) that I'll take my chances investing in the UK property market and hope to buy somewhere abroad on retirement.
The holiday home abroad thing has lots of costs and red tape which can be a logistical and financial burden which can soon become work instead of play!
Muzzer79 said:
OriginalFDM said:
GT72 said:
When you get to the point of considering where to buy abroad, make sure the transports links are rock solid. A friend bought a house in France, I've no idea where, but said it was lovely and house prices were reasonable. 2 years into their ownership and Ryanair stopped flying to their local airport. They can still get to their place, but it's significantly more awkward and weekends away are far more difficult.
Yeah that was something I immediately thought. We’re both full time employed and will still want to do other holidays so will need to be easily accessible with at least a backup plan for if a carrier stops easy service!The idea of a holiday home has always been internally vetoed in my head because:
1. Restriction - if you have a holiday home, you feel compelled to use it, which limits other holidays. Why pay to go to (X) when you're already paying for a house in (Y)??
But what if you get bored in (Y)??
2. Financials. A holiday home, to me, represents a highly risky investment. Putting that cash into a better UK home seems (rightly or wrongly) safer in the long term.
3. Everyone I know who has a holiday home, unless they're minted, spends at least some of their time there decorating, repairing, buying things, etc. This is not what I want to do on my holiday. If they rent it out, they spend time at home dealing with grief from renters.
I have long since (and quickly concluded) that I'll take my chances investing in the UK property market and hope to buy somewhere abroad on retirement.
That said, one of the reasons I bought was to be able to make the house my home. With that in mind, I actually enjoy your point 3 for the most part. Yes, some jobs can be an arse (painting sodding balustrades for example) but many of the bits are actually quite pleasant. Painting in the sun or working on the car, beer in hand. Amazing how the sun changes everything! Like any property, however, it is an ongoing thing that there is always something needing doing and can see for many people that would be the last thing that they want from a "holiday". For me, its not really a holiday however, its just swapping house in UK for house abroad for a period of time. I work the same, play sports the same, go for a beer the same, do chores around the house the same. If, however, it was for a few weeks every 6 months then I wouldn't bother.
Most holiday home owners I know spend the first few days of every holiday sorting out s
t.
Ski chalet in Trois Vallees; have to go “open” the house every winter, switch everything back on to find out fuses gone, appliances broken.
Villa in south of France; a rat family has nested somewhere and “insert any creature here” decided to drown in your pool despite the decking.
To each their own, but handing your bag to the doorman with a €100 note may be more fun than giving it all to the local hardware shop...
t. Ski chalet in Trois Vallees; have to go “open” the house every winter, switch everything back on to find out fuses gone, appliances broken.
Villa in south of France; a rat family has nested somewhere and “insert any creature here” decided to drown in your pool despite the decking.
To each their own, but handing your bag to the doorman with a €100 note may be more fun than giving it all to the local hardware shop...
OriginalFDM said:
Apologies for the rather woolly/theoretical post but here goes....
We’re in our early-mid thirties. £200k mortgage. No kids and not gonna happen, so no one other than ourselves to worry about.
No savings at all as we’ve been repaying loans but once things are all paid off we will be earning c. 100k between us, bringing home around 5.5k p/m after paying 10% into pension and no debt other than mortgage (c. £750 pm)
We have got rather used to taking nice holidays and spend a good chunk of disposable income on this.
Our plan once totally free of debt was always to buy a nicer property in the UK and essentially stay there til we’re no longer bound to this part of the country due to work, then retire somewhere where you get more value for money house wise.
Lately we’ve been talking about the idea of staying put with a more modest home here and exploring the pipe dream of having our own bolt hole somewhere within 3-4hrs flight from UK.
I know absolutely nothing about how this would be financed or whether it’s remotely doable on our salaries, or wether it’s the reserve of the uber wealthy and I should stay in my lane...
Any pointers of where I might start digging into this half baked idea much appreciated!
Weve been down the holiday house route twice , and we sold both at a small profit . We're a little older than you now but in a similar position when we did it . We’re in our early-mid thirties. £200k mortgage. No kids and not gonna happen, so no one other than ourselves to worry about.
No savings at all as we’ve been repaying loans but once things are all paid off we will be earning c. 100k between us, bringing home around 5.5k p/m after paying 10% into pension and no debt other than mortgage (c. £750 pm)
We have got rather used to taking nice holidays and spend a good chunk of disposable income on this.
Our plan once totally free of debt was always to buy a nicer property in the UK and essentially stay there til we’re no longer bound to this part of the country due to work, then retire somewhere where you get more value for money house wise.
Lately we’ve been talking about the idea of staying put with a more modest home here and exploring the pipe dream of having our own bolt hole somewhere within 3-4hrs flight from UK.
I know absolutely nothing about how this would be financed or whether it’s remotely doable on our salaries, or wether it’s the reserve of the uber wealthy and I should stay in my lane...
Any pointers of where I might start digging into this half baked idea much appreciated!
Edited by OriginalFDM on Thursday 6th February 12:02
If I were you I'd forget the holiday house thing , your tied to the same place and if it's mortgaged you'll want to rent it out to justify having it and then start accruing maintenance and tax costs , we didn't as we didn't need to but our situation was somewhat unique , and we started taking holidays from our holiday house through boredom.
Save your money , invest it wisely , retire early and rent someone else's holiday property for a few months a year slightly out of season and live your life comfortably in different countries for a lot less than owning your own holiday house , its the reason your here .
Each to their own but the only good part about having a holiday house in my experience is talking about it , and that gets very boring very quickly
JulianPH said:
From an emotive perspective it is good thing from a feel good sense but the financials can be a different matter.
You will have the costs on interest and capital repayments on the mortgage, the deposit, the estate agency fees and local taxes (these can be up to 10% of the purchase price) and then all the running costs, utility bills and ongoing maintenance costs.
These can seriously stack up each year and when you divide these by the number of weeks you actually use the place it can be far more cost effective to rent somewhere when you need it and let someone else deal with the hassle and costs.
Having said all that, a good mate of mine is currently in Nice buying furniture for a holiday home he completed on a couple of weeks ago and is absolutely thrilled with his decision!
It can be a head or heart thing, to be honest.
Good luck in whatever you decide to do.
Or you can fund Julian’s race car sponsorship ...You will have the costs on interest and capital repayments on the mortgage, the deposit, the estate agency fees and local taxes (these can be up to 10% of the purchase price) and then all the running costs, utility bills and ongoing maintenance costs.
These can seriously stack up each year and when you divide these by the number of weeks you actually use the place it can be far more cost effective to rent somewhere when you need it and let someone else deal with the hassle and costs.
Having said all that, a good mate of mine is currently in Nice buying furniture for a holiday home he completed on a couple of weeks ago and is absolutely thrilled with his decision!
It can be a head or heart thing, to be honest.
Good luck in whatever you decide to do.
When you add up the financials for that, the house abroad seems a lot more sensible.
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