articles
Buying a Holiday Property
Buying a holiday property is mostly nowadays quite straightforward.
But first, some checks. Check that you have some money under the mattress. If you have some money in a bank, check that the bank is still in business. If you want to buy a property with a mortgage (remember those), then you will need the help of a specialist mortgage adviser (if they still exist).
Okay, lets say you’ve got the money, or you’ve got the mortgage, what now. First things first, take a step back and think why you want to buy. Holiday locations are great – you have a great time, brilliant meals, nice nightlife and all things seem right with the world. That’s the emotional view.
Now have a think what it would be like owning a property in your particular paradise. What do the locals have to put with and what kind of an investment opportunity does it give you? You might have enough spondula to not worry about you’re money working for you, but nowadays, even the super-rich have to make sure they are getting a good return.
So, ask yourself, you’re investing x amount of money; what do you hope to get in return? You might occupy your property say only four weeks of the year; so can you let it out for the rest of the year? If so, what are you up against in terms of competition? Are there another thousand similar apartments, all trying to be let out? And if things get tough, can you sell it quickly?
You will have to pay agents’ charges, at they organise lettings, ensure the property hasn’t burnt down and look after minor problems on your behalf. You also have to consider charges that are payable even if you don’t let your property, including local tax charges and such things as water rates. Are you worried about security? If someone breaks in and claims a squat, what do you do then?
And look at the horror stories that have come from Spain. Many people have had villas literally taken away from them because Spanish property law has a number of provisions for reclaiming land titles and rights. Developers have been able to demolish people’s homes in order to build their new estates. It’s a jungle out there, which brings another point home: always use a reputable lawyer out in the country in which you intend to buy your property.
Laws are different in every country and what you take to be common sense, or a fundamental human right, might not be so clear cut in another country’s courts. Get your lawyer to explain the basics and get them to work through the various scenarios of what might result if the worse happens. This might include the development going bust (you’ve paid the deposit and waiting for the apartment to be finished, yet its gone under before the title has passed to you); a long lost relative turning up of the guy whose property you’ve just acquired (and claiming to have title to your property); or, some ancient right which means the mayor can live in your house (you might laugh, but no doubt it has happened somewhere).
If you have the money and are thinking of buying a holiday property, then take a deep breath and make sure you do your homework. Don’t buy in haste and repent in leisure.
< back
