The world is a big place and it behooves us to explore as much of it as possible, especially when we have our kids in tow. Travel is the best gift we can give our kids. A sun-drenched vacation enriches their lives in so many different ways. It makes them better learners, engaging their minds in ways that are only ever achieved when we are outside of our comfort zone. It exposes them o a wide range of people from different cultures, backgrounds, and traditions which will help to give them a broader worldview and an appreciation for multiculturalism. It also helps them to develop an aptitude for languages, attuning their ears to the subtleties of inflection and syntax which will help them progress in the study of languages in school. But while life may begin outside of our comfort zone, there’s also something to be said about enjoying all the comfort and familiarity of home in a faraway place.
If years of globe-trotting have seen you fall in love with a particular destination, it’s understandable that you may want to put down some roots there. A holiday home can offer you the best of both worlds, bringing you the sense of familiarity, wellness, convenience and comfort that you get from your own home along with the exoticism and mystery of a faraway locale. Plus, when not in use it can also be an extremely lucrative money spinner which supplements your income and helps you to prepare for the future, give your kids a helping hand in their adult years or simply enjoy some of the finer things in life. But of course, if it were easy to make money buying in foreign markets, everyone would be doing it. Here we’ll look at some of the things you will need to consider in order to make sure that an overseas purchase is not only sustainable but lucrative and stress free while also affording you a gorgeous location in which you can spend your vacations with all the luxuries of home and not having to worry about whether your hotel room is really as good as it looks on the website…
Why buy overseas?
Aside from having a holiday home for yourself and your family, an overseas property is a shrewd financial investment, too. You may have considered purchasing a rental property domestically but been put off by the prohibitive prices and the fluctuations of investment/profit ratio. Not only is buying domestic property expensive, maintaining it and shelling out for property management company fees costs a pretty penny too. Unless you have the time, tools and talent to attend to the property yourself, carry out any repairs and keep the place fully functional you may find that the anemic profits take a while to grow your personal wealth.
On the other hand, there are many parts of the world on the cusp of an economic boom where property bought for a reasonable price today will yield big money in rental income in a few years’ time. If you were to buy a house in countries across Asia and Eastern Europe, for example, you would find far more affordable properties but you will also find greater opportunities for capital growth and a far more advantageous mortgage payment: rental income ratio.
Location, location, location
Of course, having made the decision to buy overseas, finding the right location is of paramount importance if you’re to ensure that you get the best value for money and maximize your rental yield. It’s important to look for locations which are on the up economically and/or in terms of tourism. Of course, beachfront properties will come at a premium wherever you buy but some properties represent better investments than others. The following are all great places for new overseas investors to set down roots;
- Medellin, Colombia- South America is a no-brainer if you like hot weather, gorgeous topography and a splash of local color. Medellin, despite its thriving and industrious nature, has struggled to shake off its associations with the late Pablo Escobar. But since Escobar’s death, the city has seen a huge influx of investment with property prices rising steadily. You can currently get a nice 2-bedroom apartment for around $100,000 but this is likely to change in the near future.
- Jarakarta, Indonesia- Indonesia’s economy is on the up both in terms of thriving industry and tourism outside of the ever popular Bal. As Southeast Asia’s largest and most richly populated country, it’s a great deal for an investor.
- Abruzzo, Italy- Despite an enormous demand for property all year round, Italy has always been one of the best buys in Europe in terms of rental income. In the picturesque and popular resort town of Abruzzo, you can expect to find a decent fixer upper in a great location for less than $45,000.
Needless to say, this is not just another rental property. It’s also a holiday home, so it’s vitally important that you buy in a location that you and your family are in love with. Fly out to view property as often as your finances will allow. Try and get a feel for what the market is like inside and outside of peak time. Get a feel for what local attractions and amenities the area has to offer or are currently in development. The more the area has to offer, the more chance there is that your calendar will be full of high yield, short-term rentals.
Just remember… Your holiday home is not your own
Decor plays a huge part in the appeal of a property when it comes to short-term rentals. While your holiday home is a place for your family to relax and feel at home, remember that it also needs to make money. Try not to get too idiosyncratic with the decor, lest you scare away prospective tenants. Likewise, avoid filling your holiday home with anything too readily breakable or of sentimental value.