Buying a holiday home may be one of the greatest investments that you ever make. First and foremost, the second property will bring an extra layer of comfort and convenience to your future vacations. This ability to create even more magical memories will make it a truly valuable asset from a family perspective.
Moreover, your second property will only appreciate in value over the years to come. When combined with the potential rental income, it can become an amazing financial asset. Still, if you want the finances to add up, learning to save money in key areas should be a priority. Here are three steps that can lead you to success.
Borrow On The Right Terms
One of the best ways to save money when buying a second home is to secure the best mortgage. The best solution might not be with the same lender that you used for your primary residence. Therefore, using a mortgage broker or financial advisor that specialises in holiday homes is advised. The experts will help you consider all aspects of the purchase as well as letting out the property to short-term tenants.
Lenders may also work out the interest-only figures for your mortgage. Knowing whether you want to take this route on a capital and interest basis will be vital. Of course, you can make further savings by finding a property in a location where homes are a little cheaper.
Get Money Back After Your Purchase
When buying a holiday home or second property, you don’t only need to concern yourself with the purchase price. There are a variety of additional costs that will be encountered. However, many of those fees are actually affordable. Pursuing a stamp duty refund on your second property, for example, could help you claim back thousands of pounds. This could instantly change the financial outcomes of managing your property.
It is also possible to secure various forms of tax relief when buying furnished holiday lets or when inheriting a property. Understanding Capital Gains Tax (CGT) relief and Inheritance Tax relief isn’t easy. However, a financial advisor will ensure that you see the full benefits.
Complete Upgrades Yourself
As with your primary house of residence, it’s likely that the holiday home will require some repairs. One of the best ways to cut these costs is to complete basic DIY projects that allow you to avoid hiring an expert. Of course, more advanced projects and structural changes will require a pro. Where possible, though, the cost-effective DIY approach is particularly beneficial for holiday homes. After all, your time in the property will be limited.
If the holiday home is located hundreds of miles away from your main property, you must take this into account. Travel costs mean that moving back and forth is far too costly. Spending a few nights at the holiday home to complete the updates in one go is advised.
The Final Word
Going forward, you can save money on the ongoing management by partnering with a reliable holiday home management company. Aside from aiding your finances, it can make holiday home ownership far smoother. This will improve your love of the property when you’re on vacation too.
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