Considerations for Buying Your First Vacation Home Abroad
Does the idea of having a home away from home enchant you? If you have been considering buying a vacation property abroad, you are not alone. There are many reasons why overseas property can be an excellent investment opportunity and a great escape from everyday life, but there are also many considerations to be made before purchasing your first home abroad. Read on to find out more.
Pictured: Platinum Bay, Holetown, Saint James, Barbados | Image © Barbados Sotheby’s International Realty
Escape the Ordinary
Owning a vacation home means owning a little piece of paradise that you don’t have to worry about booking. Whether you enjoy on-the-spot getaways or vacationing on a regular basis, your property is always available and always just a plane trip away. Vacationing abroad means being able to shrug the weight of the world off your shoulders, immerse yourself in a new culture, and escape the ordinary. Additionally, instead of just being another tourist, you have the ability to put down roots in another culture and possibly even qualify for resident status or second citizenship.
Another benefit to owning property abroad is its potential as an investment. Owning property abroad, especially vacation property, can be a very profitable way to diversify one’s portfolio if the proper research is conducted beforehand. In countries with rising tourism, industry, and beautification, the property’s value will rise with the housing market and even surpass its market value with careful planning and maintenance.
Pictured: Signature Villas, The Palm Jumeirah, Dubai, United Arab Emirates | Image © LUXHABITAT Sotheby's International Realty
What To Know Before You Buy
The chief concern among many when buying a home abroad is financial preparedness. First, have a conversation with your financial advisor, tax expert, and attorney about the legal and financial prep needed to buy your home. Depending on the country and its laws, the buying process can be lengthy, so having a good understanding of what is needed can help speed the process along. You may need to hire separate legal or financial council who specialize in the specific tax and property laws of the country you are buying from, and you will most likely need to prepare for logistical hurdles such as opening an overseas bank account or trust, dealing with added tax forms, etc. Partnering with the right advisors beforehand can make the process much smoother.
The second most important factor in owning property abroad is ensuring that your property is protected and that the home is regularly maintained when you are not there. This will also be crucial to increasing the value of your vacation home. You will likely want to hire a caretaker, or more likely a team of professionals who will be able to look out for the property while you are away, prepare it for weather events or changing seasons, and perform regular home maintenance.
Pictured: Xingfuliao, Tamsui Dist., New Taipei City, Taiwan, 251 Taiwan | Image © Taiwan Sotheby’s International Realty
Advice From the Sotheby’s International Realty Network
“I find many luxury buyers in my market taking active vacations in places with great scenic beauty, where they can kayak, hike, or sail. Many have ventured to places such as Costa Rica, Iceland, the Seychelles, and South America — particularly Chile and Argentina. Two surprising spots that seem to be popular with people in my market are Panama and Cuba. Turnkey properties that give a buyer an authentically laid-back beach lifestyle are doing the best in our marketplace.”
Ruthie Ravenel | Real Estate Professional | Daniel Ravenel Sotheby’s International Realty
“Savvy home buyers will look past the physical characteristics of a property and instead focus on its site. Large properties located on a busy intersection may still not carry the same appeal as large beachfront homes or a large home and land located in a cul-de-sac.”
Will Burggraf | Burggraf Group | Aspen Snowmass Sotheby’s International Realty
“It used to be that people wanted smaller homes or condos that would be easy to maintain from afar. Now we’re seeing more buyers looking for larger homes that will fit their whole family — parents, children, and grandchildren — or a group of friends. Clients want to share the places they love with the people who matter most, and I think that is a wonderful thing.”
Rachel Umbreit | Real Estate Professional | Celia Dunn Sotheby’s International Realty
“Before you sign the paperwork, it’s a great idea to visit your prospective vacation home during all seasons if possible. After all, different areas have unique traits during different seasons. You’ll want to make sure that your holiday home will get as much use as possible, not just during the summer or winter.”
Joy Bender | Aumann Bender & Associates | Pacific Sotheby’s International Realty
Pictured: Ramatuelle, Provence-Alpes-Cote D'Azur, 83350 France | Image © Côte d'Azur Sotheby's International Realty
Location Is Everything
With so many stunning villas, condos, and homes across the world, picking the perfect place to begin looking for your dream vacation spot can be daunting. We recommend that you start by asking yourself a few key questions to find the type of environment you connect with the most and will love for years to come: Is an oceanfront property a must or would you prefer something nestled in the mountains? Do you prefer a warm or cool environment? How far away would you prefer to travel when vacationing?
Not only is it essential to make sure that the location will be a good fit for you, but also that you will be a good fit for the area. It is recommended that you speak enough of the location’s native language to be able to communicate effectively with its residents, or hire an interpreter if need be. Just as important is understanding and abiding by the culture and customs of your prospective second home. Finally, make sure that the area you plan to buy in possesses adequate utilities, transportation, healthcare, and any other everyday amenities you will require while staying abroad.
For investment purposes, it is also beneficial to analyze the current state of the local housing market, tourism, and rate of industry in the area. Make sure you are planting roots in a place where tourism is active and local industry is on the rise, and where the residents and government are committed to ensuring that the market thrives. Other financial factors, such as taxes and property insurance, should also be factored into your decision.
Pictured: Località Pevero Golf, Porto Cervo, Sassari, Italy | Image © Italy Sotheby’s International Realty
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