Anyone buying a vacation home goes through a number of challenges before the plan becomes feasible. A second home needs to be appropriately decorated and renovated for use by vacationers, it needs to be in desirable location, it needs to be managed remotely, and there are a whole host of tax implications which need to be worked out before it goes on the market. At that point, it actually needs to attract vacationers.
Also, the level of work that needs to be done on a property and the level of attention that needs to be paid to it by the owner can vary depending on what type of property it is. Hot Springs Village, rentals experts out of Arkansas, say that vacation communities require less attention from the properties owners and are often managed on site.
With all of this to consider then, it is no wonder that buying a vacation home abroad is not the most popular choice for those looking to invest in one and rent it out. While there are many advantages to doing so, crossing international borders simply requires so much more preparation.
Nevertheless, it can still be a winning investment – you just need to know what you’re doing. An estimated nine million Americans are doing it already, either to live in the property themselves or to rent it out.
Investment or Personal Use?
Before getting on to some tips, it is vital to stress that the very first thing you should get clear is whether the property is an investment to be rented out to others or if it is for your own personal use. The reason for this is that, in the former case, you not only need to secure the property but also navigate all the local renting laws and tax liabilities related to renting it out.
If you are not going to be living in the property, remote management also becomes an issue. Information technology has made this much easier in recent times, but a geographical gulf so wide means that you will likely hand over some responsibility to local services and authorities.
So, working out why you are buying the property is certainly the first step. After that, you can follow these tips in order to make the investment a success.
Find a Local Agent
Or, at the very least, an agent who understands the local market. This is essential advice for any property purchase, but it becomes especially important in the case of foreign investments as there are a range of local laws and regulations to navigate, most of which you are almost certain to be unfamiliar with – even if you can read them in English.
Choose an Area That is Seeing Growth
You will need some expert market analysis in order to do this successfully, but you want to invest in an area that has a future and attracts holidaymakers. This is also essential advice if you want to see the value of your investment grow.
Learn About Vacationing in the Area
This is all about learning what your potential tenants will be doing and what they will need when they are staying at your property. An obvious example would be recommending sunscreen and supplying towels if you are investing in coastal property in a warm area. Of course, it does get more complicated than this. Research the area.
Advice beyond that given here needs must be more specific, and much related to the country where your potential vacation home is located. These tips, however, represent the most important bases to cover first.