For many people, owning even one property is beyond their financial reach, but if you are lucky enough to have a second home, whether it came to you via an inheritance or you invested your savings in property, it is important that you make the investment work for you. If you don’t, you won’t ever realize its true value.
So what is the best way to make your second home pay for itself?
As long as it is well-maintained, property rarely loses value. In fact if you invest in an up and coming area, you stand an excellent chance of making a decent capital gain if you hold on to the property for a long time.
Leaving a property to sit empty for any length of time is never a good idea. They tend to attract undesirables and more often than not are vandalized.
So, if you don’t want to live in the property, what are your options?
Some people buy second homes in locations they enjoy visiting for holidays and short breaks.
This often works out well if you like to get away regularly, or you have a large family who will be happy to make use of the property.
But if you don’t see yourself being able to escape for more than a couple of weeks a year, investing in a holiday home doesn’t make much sense from a financial perspective and you would be better spending your money on a time-share.
Renting out a second home.
Second homes can be rented out, thus giving you a steady income.
Short-term holiday lets are ideal for properties located in attractive places where tourists are likely to be looking for accommodation. Properties in university towns and cities could be ideal for students.
If you own a property in a rental hot-spot, there will be plenty of demand, so it shouldn’t be too difficult to find a tenant. However, if it was that easy, everyone would be doing it, so rest assured that renting out a second home is not a decision to be taken lightly.
For one thing there are a lot of legalities to be aware of, and for another, it can sometimes be difficult to find a suitable tenant – i.e. one who pays the rent on time and will treat your property well, at best like it was their own property.
Health and safety.
Health and safety are important considerations.
All rental properties must have smoke alarms fitted as an absolute minimum. Larger properties will need more sophisticated smoke sensors and ventilation systems (check out tealproducts.com for some great information), and if you plan on splitting a larger house into smaller bedsits or apartments, there are many rules and regulations you must abide by.
In short, although it is sensible to look into renting out a second home in order to generate income and prevent it from being empty for long spells, don’t rush into anything and make sure you do your homework first – just to make sure you don’t get your fingers burned.