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so who owns a hoilday home /2nd property

Discussion in 'off topic' started by petespeed, Jan 9, 2019.

  1. mandryka

    mandryka pfm Member

    £10K p.a. sounds like very good profit on a flat to me.
    PhilofCas and Mr Cat like this.
  2. stevec67

    stevec67 pfm Member

    It's where he puts the mods when they are naughty.
  3. Mike Reed

    Mike Reed pfm Member

    You're nearly there as regards the toi let aspect. Unless the 'ugly shower' describe the current incumbents.:)
  4. Suffolk Tony

    Suffolk Tony pfm Member

    Where's what?
    Sue Pertwee-Tyr and SteveS1 like this.
  5. Still

    Still beware of the duck

    diversify pfm in to the holiday sector simply by putting one of your systems and bed in there.
    ff1d1l likes this.
  6. booja30

    booja30 pfm Member

    We used to have a cabin with a view on an island in the Pacific Northwest. We would go 3 weekends a month during the first year... then 2... then 1... then a few times each season. At that point, every time we went the roof and gutters needed cleaning, weeding done, etc. We had stopped traveling because we felt guilty if we didn't use the cabin.

    It went up in value far slower than a similarly priced investment close to the city. We eventually realized that for the amount we were paying (mortgage, insurance, utilities, property tax, etc.) we could rent amazing properties for the weekend a couple times a month wherever we wanted and have more money left over. The amount we spent on it every 3 months would pay for a 2 week trip to somewhere in Europe, Thailand, etc. We considered renting (short or long term), but with the cost of property management, extra insurance, maintenance, it wasn't going to be a productive investment.

    We sold it a few years ago and it was a huge relief. We have done ~4 weeks of world travel each year since then, and our savings rate is a lot healthier.
    Sue Pertwee-Tyr and hifinutt like this.
  7. TheDecameron

    TheDecameron Unicorns fart glitter.

    The flip side of owning . There’s also the opportunity cost- “I bought the thing so, I need to make use of it” when you could have gone to lots of other places.
    kennyh likes this.
  8. TheDecameron

    TheDecameron Unicorns fart glitter.

    I see a terrible problem with letting out adjacent accommodation with very high efficiency 15” speakers to deaf old guys who fancy reliving their youth. That rules me out.
    Still, ff1d1l and booja30 like this.
  9. Still

    Still beware of the duck

    hifi holidays in other people's misery

    TheDecameron likes this.
  10. kennyh

    kennyh pfm Member

    I think the bigger pain is is "I bought the thing, so I need to check on it".

    And a pain it is when it's 1600 miles away.
    hifinutt likes this.
  11. JTC

    JTC PFM Villager...

    I can’t be certain exactly how much we make out of it, as - like any holiday let - it’s somewhat ebb and flow. We also plough a fair bit of the income into improving the building, and being 300 years old (albeit with recent rebuild) there are always little things to do. I’m always hoping the adjacent flat (part of the same building) comes on the market, as I could then convert it to be a very nice four bedroom home on three levels, sell our main home and move there.... mind you, we’d have to pay that really shitty +3% stamp-duty levy that’s since been introduced.... anyway, for all that, I wouldn’t recommend FHLs as a route to riches. The ‘profit’ (as it were) isn’t really a profit at all, given that we draw no payment for the administration, turnarounds, etc.; were we to factor in our time, like many small enterprises, it’d look far less attractive, and that’s something that many people forget...
  12. mjw

    mjw pfm Member

    I retired in 2010 and used a chunk to buy a small house in a village in the Midi. Never intend to rent it and we use it for two+ months each year. Good friends and family up that to around four months. The summers are hot, the local market’s great and we have good rail links for touring around.
    Water, electricity, insurance and the two taxes come to just over £1000 so not too onerous for two months in the sun.
    I’ve since discovered that much of the village is 2nd homes but mostly owned by French people after inheritance. It’s also worth pointing out that young French people rarely want to continue living in the rural settings that Brits seem to like and the simple fact is that if it wasn’t for us/me buying them and keeping them in a good state of repair they’d slowly decay and the French state wouldn’t get the taxes.
    My French neighbour is a retiree in a 2nd home. His principal home is an apartment just 20km away at Albi, where he spends the winter (these old houses are almost impossible to keep warm in winter - open plan, bedrooms in the roof void etc.).
  13. mandryka

    mandryka pfm Member

    £1K a year tax is not bad at all -- I always thought that it would be much higher in France. I'm quite tempted to do something similar.
  14. ex brickie

    ex brickie pfm Member

    My feelings about this differ depending on stage of life. Whilst working it feels like another hassle having to be responsible for a property overseas (I'm thing Spain) and probably frequent visits.

    However, on retirement a cheap property abroad that I would use for the winter - and others could use at mates rates - seems attractive...... Depending on Brexit. I wonder whether foreign ownership in France or Spain might become a reason for the host country to increase its property or other taxes.....
  15. doctorf

    doctorf left footed right winger

    I agree re retirement.
    Bear in mind that the Spanish do not levy any extra tax on non EU property owners at the present time so it’s unlikely they will suddenly levy anything on uk property owners in the future.
  16. ex brickie

    ex brickie pfm Member

    I'd like to think you are right @doctorf. The Spanish economy couldn't easily withstand a mass exodus of Brits! I don't know whether the purchase tax rate in Murcia is 9% of the property price. I haven't looked into the equivalent of 'council tax' or the relative utilities prices yet.

    The other factor I'd want to carefully consider is medical insurance. If we are outside the EU I would expect that to be potentially expensive

    Coincidentally the BBC webpage has just explained that they believe about 785,000 Brits live in the EU but interestingly the majority are below retirement age.
  17. doctorf

    doctorf left footed right winger

    9% of purchase price sounds about right.
    With tax and Legal’s, you can usually work on around 10%.
  18. tones

    tones Tones deaf

    That's what my boss found. He bought a rather nice place in Fayence in the hills above Fréjus, intending to rent it out and make a profit when he wasn't using it. He soon found that looking after it and the guests and their needs/complaints/problems was a trial that far outweighed the profit he made from rentals. Coordinating the cleaning lady/gardener/plumber/etc. from Zürich proved to be a problem, and he often had to drive down to get things done as he wanted them - often arriving to find that they'd been already done as he didn't want them! In the end, he sold it.
    kennyh likes this.
  19. hifinutt

    hifinutt hifinutt

    yes we watch far too many programmes such as homes in the winter sun, escape to the country and rarely do they mention all these downsides mentioned in this fascinating thread . the onerous stamp duty really put us off recently , a small house in a seaside town being 230k and stampduty being around 9k which makes it very very expensive
  20. kennyh

    kennyh pfm Member

    The upkeep of a Spanish house looks on paper to be very cheap for a holiday home.

    Ours for instance is rated at 250e a year, with standing orders for water,electric etc. coming in probably at maybe 400-500e per year.

    What pushes the cost up though is insurance, that adds another 350e for house and contents and the same again for the car we have there, plus ITV (MOT) at 50e. Then you have land maintenance at 60e per month. On top of that you have the "foreigner/wealth" tax which with paying someone to do the paperwork costs 260e per year. Add in other sundries like car tax and Bazura fees and it all mounts up.

    And the killer is putting money in the Spanish bank, they are a law unto themselves with regards to snatching monies for no obvious reason. The balancing act is just keeping enough in to cover expenses with not a centimos more lol.

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