Volume 04, Number 09

Travel

Holiday Haven
Your own Holiday Home By Danielle Tate-Stratton

For some families, the yearly vacation is a chance to explore new locales, jetting off to a new far-flung destination each year. For those who fall in love with a certain city, town, or even small village they may find themselves tempted to return year after year, and buying a holiday home there could well be a viable alternative to spending money on hotels or short-term rentals.

Emotional reasons for wanting to buy a holiday home may include the peace of mind of knowing that you can escape the rat race at any given time of the year, and let's face it, the effect on your popularity status among friends and family alone has to count for something! Beyond the less tangible aspects mentioned above, there can also be a very tangible financial benefit to owning a second home—the website An Investors Guide: Where to Buy Property Abroad, states: "Fact: property has created more millionaires than any other type of investment. However, one in four property investors fail to make a profit. It is just as easy to make a profit as a loss. Knowledge is the difference between success and failure." So, should you be looking for that holiday home to escape from the madness of Tokyo, make sure you do extensive research before getting caught up in the dream and parting with your hard earned cash.

While even just a few years ago holiday home locations were limited largely to the south of France, Italy, Florida, Hawaii, and similar destinations, increasingly holiday home buyers (and renters) are looking to more exotic and upcoming locales, lots of which are throughout Asia, and therefore conveniently located for Tokyoites. Especially if you are looking at your holiday home as an investment as much as a personal luxury (and who wouldn't be?), location could well be one of the most important factors you should take into consideration.

Thailand, for instance is a perennially popular destination for tourists from all over the world and also offers a fantastic investment for would-be home buyers. David Ames of Harlequin Properties believes Pattaya is "the biggest investment opportunity in the whole of Asia." Branching a bit further away, Goa, a newly developing area of India is a burgeoning holiday destination. Nick Gregor from Aguada Management predicts that Goa is "like Florida or Spain 15–20 years ago: a property hotspot in the making". With building regulations that prohibit structures from going up within 500 meters of the beach and keeps them lower than a palm tree, and with rules outlawing private beaches, Goa is expected to retain its charm, tucked away in a haven of gorgeous coastlines and perfect temperatures. Estimates range from a capital investment growth of 30 percent in five years, to a return on investment of 15 percent per year beginning in the near future.

If the idea of owning an entire home seems like a little bit too much of an investment, time commitment, or risk, consider investing in a larger property scheme. For instance, in Sri Lanka, you can purchase a room in a brand new five-star hotel, where the estimated return on investment (assuming an 80 percent occupancy rate), is 11.5 percent, which will be tax-free for the first five years. In this particular property, The Palace Hotel, prices start from around $100,000.

If the idea of owning a second property both for your personal vacation use and as a source of rental income appeals, be sure to contact local agencies in the areas within which you want to house hunt, as some of them have peculiar property ownership laws, such as Thailand, which allows foreigners to own buildings, but not the land on which they stand. As you look for property, there are certain things all buyers should keep in mind, which, according to www.holidayhomes.co.uk, obviously starts with the budget, which will probably be your biggest factor. Also make sure to analyze your priorities before you leap head first into the prettiest cottage on the block: Are you looking for somewhere to eventually retire to? Do you plan to rent it out for lots of short vacations or will you be visiting there for the majority of the time? Does the climate and culture suit both your personalities and that of your potential renters?

Also consider the location—do you want a tried and true location, sure to produce a slow but steady stream of income, or a so-called ‘emerging' market which could be more interesting and lucrative, but also carries more risk? Once you chose the city or town, also consider specifics such as proximity to the beach, shops, services, and the airport (just don't land yourself in a flight path!).

Of course, do lots of research before you commit to anything—start with online resources such as www.holidayhomes.co.uk, which, although geared towards Brits buying abroad, has interesting and useful articles, country guides, and even property listings. Once you've found your potential location online, there's nothing for it but to visit, preferably more than once so that you can get a feeling for the country—consider its climate, customs, and how the town looks once all the tourists have left. Funnily enough, we don't feel too sorry for you having to make the extra one or two research missions!