Reply With QuoteJust back from Kefalonia and thinking about doing the same.
Hi all,
Every year, as the summer ends, I consider buying a small holiday home somewhere like a Greek island (€300-€400k)
Idea would be for my wife and I to use it when it is not rented (we can both work remotely for certain periods)
I am aware of perks like the Golden Visa scheme which make the idea attractive, but I don't know how difficult it is to rent a property out to generate seasonal income.
From the research I've done, 4-5% yield seems achievable
Has anyone done it, was it successful or a nightmare?
Some additional considerations: I'd look to mortgage it (probably btl), I don't speak Greek, Kefalonia is preferred location at the moment.
Cheers!
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Just back from Kefalonia and thinking about doing the same.
Yes, I'm in Crete now and Kefalonia's beaches are beautiful.Originally Posted by gunner
Places like Fiskardo are stunning to visit too.
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In-laws have one in Turkey and I’ve been about 6 or 7 times. £400 easy jet flights and a car out there waiting make it fantastic. It isn’t rented so can’t speak on any return.
If the golden visa is difficult with a mortgage you might consider remortgaging your current property and using the cash from that instead although that may be complicated or not possible.
Yes, both good points.
Remortgaging here in the UK is certainly possible to free up the cash.
The idea would certainly be to have a car & motorbike kept over there to make trips across as painless as possible.
That said, I'm at a point where I'd need the rental income to cover my financing and running costs.
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I stayed 10 mins from Fiskardo this summer…. Had a lovely time….
I wouldn’t look to stay in Fiskardo though…. Maybe the Maganas side or where I was in Evretti…
Some wonderful beaches…. We had to take a short hike to a couple of them (was worth it)
Consider Ithika too
A fella of app 63 down the road from me, with a couple of motorbikes - was talking to him 2 months ago and he was moving LS&B to northern Spain, for his final 2yrs of working from home for a German accountancy company. He gets beneficial tax regime, and after 2yrs - gets residency.
Told me he had paid €60k for a 3bedroom newish house on two floors (lower one just garage and office) and a basement !
Even if he only lived there for 10yrs -he reckoned he could walk away from it and still be quids in!
He packed up his LHD Toyota, bike on trailer - and off he went!
(Slightly jealous - I have to say)
We've had a flat in Menorca for 10 years.
Firstly, examine closely the legislation in the country you're considering. Most governments are trying to maximise income and foreign property owners are a convenient thing that doesn't lose them many votes.
- Tax - many countries will require you to make a tax declaration for the income from letting out the property - double taxation agreements usually mean you won't get taxed twice, but it's certainly not as easy as "We'll just make some quiet cash on the side" - ignorance is not a defence to any tax authority.
- Your net income may not be as high as you think. Spain for example no longer allows non-residents to deduct running expenses of short or long term lets from income for tax purposes.
- Admin - both culturally and logistically it's complex maintaining a property from abroad, even if you are fluent in the language. My wife speaks both Spanish and Catalan natively and it took 3 weeks to get a simple shower waste pipe replaced. Maintenance costs WILL increase - other people do not take the same care as you do, no matter who they are.
- Licensing - Many countries will require a licence to rent out especially if it's short term/holiday let/AirBnB. Due to a lot of pressure from the hotel industry, in many areas of Spain it's simply not possible to get a license to rent out flats legally any more. Again, ignorance will not be a defence.
We only allow friends/family to use our flat asking for a contribution to upkeep and energy costs and it's not trouble free. We've decided that holiday letting, even if we could get a licence, would be too much hassle.
Last edited by Scepticalist; 4th September 2023 at 11:29.
Mrs P, with a small almost negligible amount of help from myself, has serendipitously fallen into the management of a couple of holiday homes for Madrid based Spanish friends of ours..All via the Air BnB platform, it´s fairly easy- straightforward...but we´re local, as in within 15 to 20 minutes drive of the properties, they´re front line to the sea thus location makes them highly sought, she has longstanding relationship with folks who clean-fix them, plus Air BnB get their 15 percent booking fee, she´s competent in Spanish...As to roi or yield every situation- locations- volume of available rentable property is going to different...working backwards based on a 300k to 400k property hypothetically you´re after 12 to 20 k p.a., doesn´t sound impossible... So really what is the market, rental prices, length of season like, are their potentially folks out of season, where you are looking.
Good luck.
Last edited by Passenger; 4th September 2023 at 11:10.
I find the Greece has a relatively short season, and really only busy between June-Sept. In some of the far SW Islands of Greece, the season continues into November, but rentals are in large supply and prices are low at this time of the year.
I personally try to avoid (not always) Greece between mid-July through end-August given the place is just rammed and can be very hot/humid (islands less so)
I love everything about Greece, but never been convinced about a holiday home which you need to generate rental income, given the short season, maintenance/organisation hassle and the ability to rent places for a month at a time at the front/back of the shoulder season very easily and reasonably.
Far SW of Portugal seems to be a great place to have a second home/rental given the pleasant round year temperatures and visitors, but it just doesn't have the same unspoiled beauty of Greece, and the sea is too effing cold to swim even in August.
A villa in the Balearics is a good bet for a rental property. Menorca is largely unspoiled. The sea can be warm up until late September. Swimming pools cool down faster but many people now using heat pumps to heat them off season - with a caveat of the points I made above and the Balearics are expensive. You're probably not going to get a decent property with pool anywhere near the sea for 400k.
I know someone who freed up capital via equity release to buy a holiday home abroad so that may be an option.
That said, if you need to rely on rental income to make it a viable proposition then I’d say don’t do it.
Last edited by Dave+63; 4th September 2023 at 12:41.
I know a few people who have holiday homes.
Looks a massive ball ache and not good investments.
I’d invest the money and use the yield to rent property.
No maintenance and admin problems.
We have a house in Chiang Mai Thailand but don't rent it out due to Thai Laws which prohibit making any money off rentals
This is where my logical mind is.
I wondered if I'm being too "dull" but I can't see a world where the net income numbers justify the hassle, illiquidity and potential risks.
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Op says he was gonna mortgage it so doesn't actually have the money as such...well not 300 or 400k...But I agree you want hassle free, don't speaka da lingo, aren't local, has to ask advice from some bums on a watch forum...Myself included...Then he's better off as you suggest sticking to renting.
It is sad that we all had access to the Golden Visa scheme until recently, and it didn’t require you to spend hundreds of thousands of pounds to get it.
I was very glad to sell a French holiday property a few months back. Bought back in the halcyon days of EU membership, it became increasingly difficult to maintain (getting hold of tradespeople at a reasonable cost in a French ski town is a real challenge) and was a long way from being a prudent financial investment.
Unless you plan to live there in the not-too-distant future, I'd rent. Way less hassle and probably cheaper.
Sigh, real shame that.
Well, I hope you made something, didn't lose out. Fwiw I know several who've scurried back to Blighty and took a loss upon sales. Yes, it's critical to have relationships with reliable, trustworthy tradespeople...and that generally takes time, effort, some facility with the local language helps.
I have a Villa in Spain and have also sold an apartment out there.
First of all don't even think of buying property out there until you are only within 2 years of retirement. Your aim in your 50s should be to avoid the usual el cheapo tourist traps and do the decent stuff such as India or whatever. The moment you buy a property it becomes a magnet, you need to go there a couple of times a year just to reassure yourself the place is still ok. Extreme bad weather is the main cause of problems.
Secondly don't buy on the coast because whilst it is fine for a couple of weeks, you will soon become irritated by bloody tourists walking around at 2.00 in the morning pulling a rickety suitcase on wheels moaning that they can't find the right apartment. Buy on the outskirts of the town where it is much much quieter and you avoid the bad behaviour that comes with the English and Germans on holiday.
Thirdly keep your UK nationality because unless you are out there for 52 weeks a year, you are better off being a UK national as long as you can live with the 90/180 day rule. We go to our place during the spring and autumn and let our sons come over for a freebie holiday during the hot summer months.
The good news is that spending 5 or 6 months every year in a villa with decent views and a pool is a fantastic way of spending your retirement. The expats of all nationalities tend to stick together in their own locality which is good and also a good source of information to get you through the bureaucracy which can be manic on occasions.
The shop food in Spain is cheap and much better than the slop we have to put up with in the UK. The meat and the veg is always way more tasty and there is a lot of local stuff to try. The wines available from the local bodega leaves UK wine merchants in the dust. I am now in the UK working through my 90 days and I will be brutally honest in that I really do feel sorry for the poor sods who have to spend about 48 weeks over here. I can understand why Passenger is so smug sitting on his arse in Spain, basking in the sun, eating decent food and having a jolly better time than 90% of forum members over here.
Finally the best advice I can give you is that what everyone is given and then ignores is to rent for about 6 months before you buy. It can take you a long time to pick an area in the locality that suits you.
I've always thought I'd get tired of going to the same place
Add into that I like being pampered on holidays, and it's been a 'no' from me any time I've considered it
Dull would be going to the same location on holiday every year to do DIY.
Unless it is planned to be a full time retirement dwelling seems not worth it.
Happy and sympathetic Mick. Grateful for luck and timing... getting in initially, relatively early thus still cheaply, certainly by UK standards...Then after looking for a year, at everything! we managed to bag a real quality bargain in a pretty village only 15 minutes from lots of beaches. But a bloody hard negotiation, really obstreperous seller not that unusual, crazed demands for large quantities of black money!!! He walked away 24 hrs before the pre Christmas closing date we'd originally agreed our hope was buy it move before Christmas! Bagged it the New Year.
Last edited by Passenger; 4th September 2023 at 14:57.
I'd disagree. I do DIY at our holiday home every year but it doesn't mean I don't enjoy it or that I don't go on other holidays as well.
100%^.....Why not keep 300/400k in the bank and use the interest to have a great 5 star holiday any place on the planet whenever you choose.
Or at least use it to rent somewhere you do like for a length of time.Buying property means you will feel obliged to keep returning.......nice until you get bored with the same location.......wouldn't do for me tbh......but were all looking for different things.
I owned it for 10 years, didn't lose on it, but the eye-watering cost of purchase and sales transactions (estate agents, notaires, stamp duty) means that it's a good deal more expensive that buying/selling than in the UK.
It was a fabulous place and I miss it, but life moved on, the kids grew up and I split with my wife. I could have just bought her out but Brexit made me think long and hard about working out there (which I had previously) and the concomitant tax implications, plus the sheer hassle of the visa process ... it all made it seem like a lot of hard work and as my new wife doesn't ski, without a great deal of reward.
I guess it depends on what you enjoy doing and how much time and money you have for additional holidays.
The friends I know who have holiday properties seem to have started to regret their purchases.
I can see the attraction of travelling light to arrive at a property and have all your “stuff” around but then you also need to have two of all your “stuff” …
Well you have the positive memories, experiences and didn't lose out, winning!
We have spent 5-6 months every year in Spain since 2010 and we were trapped over there for 8 months in 2020 due to covid. Living in a Spanish house is not like living in a wet UK house. In Spain we eat out for the main meal about 3 or 4 times a week and we often travel some distance and drop in on a nice looking place on spot. Due to the good weather we hang out with the neighbours a lot whereas in the UK, people very much keep themselves to themselves. We are often in the pool at midnight as a nice way to cool down before bed and you don't do that in the UK.
The moment we find it a drudge, we will sell up and come back.
I think OP was gonna borrow most of that 300/ 400k, It's really not sitting in the bank, unless I've misunderstood...possible!
Another bit of advice if you are retiring, clear every bloody debt and borrow nothing. You shouldn't be worrying about having a millstone around your neck when you are over 60.
When I say I do DIY, it's only a few minor bits, still get a professional in to do most things. We've also found that we don't need two of many things, holiday and normal life don't overlap that much.
A few very personal thoughts having spent much of my adult life dividing time between two countries.
Being a remote landlord is an almighty ballache. Having an agent means having someone 1000+ miles away who can shaft you.
If you’re like me, I hate sleeping in hotels and much prefer sleeping in my own bed surrounded by my own stuff. If you’re at all similar all of this points to having a place that is for YOU, plus selected family and friends as your guests. Other people won’t treat it with the same respect and your home would be no better than staying in a hotel or renting self catering accommodation.
Consider flight length and availability and cost and distance from airports. You want to be able to use the place at your convenience and ideally at the drop of a hat, even if it’s for weekends.
Consider also the convenience of your chosen location for shops, restaurants, plus any other stuff you want to do (beach, golf or whatever). Keeping a car will increase your costs and footprint.
Ideally you’ll have, find or make local friends whom you trust enough to be keyholder when you’re not there. The peace of mind is immeasurable.
As an addendum- consider security very carefully. Ideally you’ll want something that can be locked up and left for weeks or months in reasonable confidence that it won’t be targeted. An apartment in a block with communal entrance is good. An isolated cottage less so.
When the wife and I used to go to Sharm in Egypt a lot, about 20 years ago, pre kids, we half thought about buying a flat in a new development there, it was only 20k and could have done it without a mortgage, just, we didn’t go through with it in the end due to logistics and not having a clue where to start, and also the general chaotic nature of doing anything in Egypt, I sometimes wonder if it would have been a good thing or a nightmare.
Cheers..
Jase
There's something nice about visiting the same place frequently. We visit Cornwall most summers and I'd happily have a place there, and wouldn't ever get bored. However we also like to visit different places on foreign holidays, so I see the appeal of both.
My parents had a holiday home and it doubled cleaning, laundry, DIY, bins, costs and stress. Put me off for life - and theirs was only on the Kent coast
I had exactly the same in France as well. Most/some points may apply to Greece. Basically
- tax is painful re yield. Tax cover income tax, purchase tax, selling tax, water, local community, TV etc. it can become endless
- cleaning/admin/maintenance is painful to arrange/manage never mind the cost (expat tax !!)
- endless maintenance to manage when you go. So holidays become DIY weeks.
- no flexibility in location when you take hols; you feel guilty if you go anywhere else
- cost to visit end up being more then originally planned (flights, maintenance, car rental, maintenance and more maintenance).
- buying is easy, but selling is not so easy (time, price and agent fees)
Overall my learning is second homes need to be driveable, small, designed to be low maintenance/basic, with a great zero tax location and with a number of maintenance/cleaning companies in the area and with a number of good restaurants/facilities close by !! 😀
Overall idea is better than reality so if you do it go in eyes wide open as to what you are getting in to.
Last edited by JP28; 4th September 2023 at 22:17.
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