What makes a good buy-to-let property overseas?

What makes a good buy-to-let property overseas?

Many of us dream of owning a second home abroad. It becomes our personal getaway, where we can take time out in idyllic surroundings.

But, while the lifestyle aspect plays an important role when deciding to buy an overseas property, the biggest reason often comes down to money. Letting out a property can bring both significant and long term financial rewards.

It’s therefore no surprise that more and more people in the UK are turning to overseas property investment and we’ll continue to see a rise in 2016. Investing in a property abroad can provide buyers with a steady rental income as well as a base for regular holidays. But what makes a good buy-to-let overseas property? Here are five things to consider before making a purchase.

Location

Find a property that holidaymakers will be able to enjoy at any time of the year – and avoid one that is dependent on specific seasons such as a ski chalet in the winter. Most people will follow the sun, so buy a property in a destination that offers warmth and sunshine. Consider traditional holiday home markets like Spain and France, but also look further afield to areas like Cape Verde. Look at accessibility too. Check which airlines fly to your preferred location and how easy it is to get around once holidaymakers arrive. Safety and security is becoming more important too, so check the government’s travel advice.

Type of property

Once you have found a location, research the types of properties that visitors to that area will want to stay in (and what they can afford to stay in). Is there a demand for individual villas and apartments or hotel rooms and suites on a resort? Investing in a property on a hotel resort, for example, could offer greater rental returns, especially if the resort is run and marketed by a well-known tour operator. Weigh up all options and keep your target market in mind. Families might prefer staying on an all-inclusive resort that offers a level of service, as opposed to a self-catered apartment.


Activities

While some holidaymakers wish for a fly-and-flop destination, many want a place that offers a wide range of activities and classes. Again, this comes back to your target market. Those looking to relax will enjoy stunning beaches, health spas and a la carte restaurants but, if you want to purchase a property suited to families, look for one that offers access to daily entertainment, a buffet restaurant and a child-friendly swimming pool. For the more active types, consider destinations that offer resorts equipped with a gym as well as those that run watersports activities such as kite surfing and scuba diving. And for those seeking a romantic holiday or a honeymoon destination, invest in a five-star property that is catered for adults only.

Managed scheme

As with any buy-to-let property, signing up to a management scheme will increase an investor’s chances of success. You’ll be supported on all aspects of running an overseas property from advance holiday bookings through to property maintenance – highly recommended if you are living and working in the UK. If you buy a property on a resort that is run by a well-known operator, consider signing up to its hotel management scheme. The resort is likely to be marketed on a global scale through travel companies, agents and tour operators, meaning you can expect ongoing rental income.  

The future

Tourism plays a major role in driving holidaymakers to overseas property and, for as long as people continue to travel abroad, the property market will continue to grow. Therefore, regularly look at tourism figures for your preferred destination. Is the number of visitors growing year on year? Also research what the local government is doing to boost tourism. Key infrastructure improvements including supporting foreign investment and leisure development, as well as modernising the utilities, telecommunications and transport links, are clear signs of strong investment.

Finally, choose an overseas property that you are comfortable with buying. Buy-to-lets are no longer only accessible to the new and experienced, with new investors able to take advantage of various payment options. You can purchase a property outright or, if you have fewer funds to release, take advantage of fractional investments. Whichever route you choose to follow, high rental yields is the most important factor behind a decision to purchase an overseas property and, with developers like The Resort Group, you are guaranteed a minimum rental yield.

For more information, visit www.theresortgroupplc.com

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Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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