How to choose a holiday home
Inspired by this article about Property Investor James Caan from the Dragons Den I have set about with my own advice for anyone looking into buying an overseas home. In the article I link to above James Caan talks about his holiday home in Cannes. I have quoted that at the bottom of this article.
Are the flights secure ? – Flight routes can always be cancelled or can be made summer only severely denting your rental prospects. Consider if there are alternatives if 1 or more of the existing routes are cut. Whether or not this is worth worrying about will depend on how established the existing routes are and how many airlines or departure points are available to the nearest airport. If you are buying on the Costa Del Sol, no worries there will always be lots of UK-Malaga flights.
Don’t take risks with currency fluctuations. Unless you are a gambler at heart (and have contingency funds), it is simply not worth not securing the purchase price as soon as you can. Just consider what happened at the end of 2008 with the € / £ conversion. Two people could have agreed an off-plan property purchase for €100’000 at the same time in Feb 2008, the one who secured their currency on the spot would have been €20’000 better off than the one who waited till the completion date. Have a look at TorFX for currency advice
Do you want to rent out your holiday home ? A lot of people do this with a view to covering the running costs of having a holiday home, others look to rental income to pay interest on borrowed money they used to make the purchase. Have a look at our hints on renting out your holiday home
James Caan’s overseas property tip and my final advice – Detail & Research.
He bought his apartment in Cannes eight years ago for £600,000.
“It’s now worth £2.4million, and that’s in a market where everyone says prices don’t go up much,” he says.
“First, I narrowed down the choice to southern France, as it’s so quick to fly there for weekends, then I spent six months researching the market. There are so many fabulous spots on the Côte d’Azur, but you have to understand the location, down to knowing how values differ from one part of the street to the other. If you don’t, there is a high risk of getting it wrong.”
Judging Cap Ferrat and Antibes too quiet for his daughters, Jemma and Hannah, St Tropez too far from the airport, Monte Carlo lacking a beach and Nice too pebbly, he chose Cannes. Villas in the hills were discarded in favour of seafront apartments. He scoured the entire length of the Croisette to find the only block of flats set back from the traffic. He worked out the optimum height for an apartment – above the trees, below air-con units – which left him with the fifth floor.
“There was nothing for sale on the fifth floor of that block, but the wonderful thing about buying a holiday home is that there’s no rush,” says Caan. “Six weeks later, an owner wrote to say he would sell. I flew back there, walked straight to the balcony, looked at the view and bought it.”
