Overseas ‘buy-to-let’ acquisitions on the rise

The recent slow-down of the residential property market means that there is less opportunity for ‘buy-to-let’ investors to make significant short term gains in the UK, prompting a whole slew of investors to look abroad for their property investments. Add that to the fact that more people are quite prepared to arrange their own holiday by compiling all the elements on the internet, such as flights, car hire and hotel or property rentals and a potentially huge market for those seeking to let out their properties emerges.

Part of the reason for the shift away from package holidays towards independent travelling is down to the ease of booking on the internet. But another important reason is that the standard of finishing and decor at holiday homes tends to be far superior to those in hotels in the same price range, meaning that families get more from their money by arranging their own holidays.

This shift towards independent travelling has not gone unnoticed by those wishing to invest in property overseas. In the past many purchasers quoted capital growth as the main reason for buying a holiday home. However, more people are taking notice of the fact that there is a real business opportunity in owning property abroad from rental income too. Overseas estate agents Savills questioned 12,000 owners of property abroad and found that capital growth was the primary reason for purchasing their holiday home. However, many were aware of the business potential of offering holiday lets at their properties but for whatever reason had not turned that awareness into reality.

Indeed, a recent survey by YouGov highlighted that almost 30% of all people who own second homes abroad choose to stay there only twice during the year, leaving the property empty for most of the year. That amounts to a significant lost opportunity as a reasonable amount of income could be generated via holiday rentals. Obviously, capital growth and the freedom to be able to visit their holiday home whenever the mood takes them is what is most important to that type of investor, but they are aware that they be missing out on the opportunity to have most of the costs on the property paid for by holiday rentals.

As almost 49% of people buying second homes abroad do so using a mortgage, they would obviously be more at risk from any currency fluctuations and a downturn in occupancy rates if they were reliant upon high occupancy funding their loan repayments. However, for others in a more fortunate financial situation, income from holiday rentals would represent a real opportunity to add additional funds to their capital investment pot – a fact that a lot more investors have caught onto lately.

Article Source: http://www.theukarticledirectory.co.uk