View more on these topics

Investors urged to look further than holiday lets

Most British investors are missing a trick by focusing solely on holiday lets when buying overseas, reveals Assetz.

Its research suggests much more reliable returns with a lot less work can be gained by investing in properties to let to the local market.

There is a common misconception that overseas property investment must mean holiday homes, with British investors competing fiercely over properties located close to airports, beaches and golf courses.

Most of the rental income must be generated throughout the traditional holiday seasons when the properties are let to a series of holidaymakers for short periods.

While these properties can undoubtedly generate strong returns, especially in counties with a strong tourist industry such as France, the alternative route into overseas property investment through letting to local people is usually more reliable, is much more a hands-off investment and is often overlooked.

Local lets are usually considerably less hassle for the investor, as one tenant will probably last for a year or two, perhaps longer, compared to holiday rentals which change every one to two weeks, often with long voids in low season and a high cost of ‘changeovers’.

Property in city centres such as Saint-Brieuc in Brittany, Montpellier in the Languedoc (France) or Limassol in Cyprus, is usually less expensive than in tourist hotspots, meaning investors can access better quality property at lower prices.

Stuart Law, managing director of Assetz, says: “Amateur investors in particular are driven by the desire to holiday in their overseas property once or twice a year, therefore focus on holiday destinations which they might ultimately choose to retire to.

However, with the time taken to manage the holiday bookings and the hassle of arranging changeover/cleans between holiday let clients, it would make sense financially to consider separating the investment from any intentions for personal use and seek local let property.”

Recommended

Nationwide denies fiddling figures

Nationwide has rebutted accusations that it is falsely advertising its products in an attempt to gain customers. Nationwide reportedly asked sourcing system Trigold to change the Bank of England base rate back to 4.5% on its system despite the recent 0.25% increase. A source at Trigold says: “Nationwide called and asked us to lower the […]

GE partners get improved deals

GE Money Home Lending is to offer its key partners improved products on its First National semi-exclusive range, including a 500 reduction on completion fees. As part of the deal, partners will benefit from lower initial rates plus improved reversionary rates and early repayment charges. The lender is also offering 500 off completion fees which […]

Cooperation will benefit all players

The idea of competitive advantage through cooperation is a new one to mortgage lenders as they have always tended to keep their technology to themselves for fear they might give too much away. But the environment is changing.

Glasnost is needed among lenders

I have been following the unfolding story of len-ders supplying brokers with mortgage account information with growing interest.

The future of active management is now

Fees under pressure. Regulatory moves against closet indexers. Rapid advances in financial technology. Shifting sentiment among investors. Such mounting challenges have led to widespread speculation about active management’s shrinking future. But a closer look inside intelligent portfolio construction today tells a story of expanding roles, added value, and innovative risk-adjusted, lower-cost solutions. Four investment experts […]

Newsletter

News and expert analysis straight to your inbox

Sign up