What to do with 30K from Rabo - and ? on foreign property.

Hi Vincentv,
My wife and I purchased a holiday home about 12 years ago. While not particularly cheap to run, it has been the best lifestyle investment we have made. Thanks to Ryanair mainly, it has been possible to "nip" down for long weekends off season and to enjoy multiple visits over the hotter summer months.

Very important to get to know the area before purchasing as you will probably retain the property for 5 years + at a minimum.
Kids and their needs are also a significant factor when purchasing. While adults may be happy to laze and potter about on a regular basis, kids / young adults will get bored and will want to be able to get to the beach or local entertainment area under their own steam.
If you plan to rent out the property in order to have it contribute towards its upkeep, then you will need a reliable English speaking locally based property manager as well as an accountant as you will have to perform a local tax return annually as well as an Irish one net of any locally paid taxes. A foreign property needs to be lived in and used for all kinds of maintenance reasons, so I would recommend you factor in part rental into any decision making. We have also considered rental income as a contribution to local tax obligations and maintenance fund which has worked out well for us.

Our experience of the French property market is that prices are extremely stable and do not tend to fluctuate. Therefore it would be extremely unwise to consider capital growth in the future based on foreign property prices today. While there are many cheap properties to purchase (in France at least), if choosing to rent out a property to short term holiday makers, then you will need to ensure you purchase in a reasonably well known town or beach resort. Holiday homes purchase for little money that are based in remote hamlets or small villages will be far more difficult to rent.

While the affordability of a foreign holiday home was most definitely a factor for us, the economics fade into the background when you are heading for the ferry or arrive at the car rental desk. The freedom and flexibility offered as well as "knowing" the area you are going to (restaurants / bars etc) without having to spend the 1st week or 2 acquainting yourself with a new resort is very rewarding.

Additionally, we find that we can use house swap websites to exchange 2 weeks in our holiday home for two weeks elsewhere and although we've only done this a couple of times, it has worked out great.
 
Very interesting Alistair.

12 years ago when you made purchase - were you mortgage/debt free? Did you get a new mortgage to buy the foreign home?
Was the cost a hit in the early years? How did you make final decision on which property?

I'm more interested in the lifestyle factor, that as an investment opportunity. As our family get older, they will not want to holiday with us anymore - but if with their own friends or later with their own families they may take the opportunity to holiday with us if we had a base.
Also mentioned golf earlier, played this weekend and nearly got frost bite!! - warmer climate much more appealing. When you holiday diff places every year golf not really on the agenda, takes too much time if only away for 2 weeks, and expensive for green fees. If semi resident would have the possibility to join local club, much more feasible and economical.

Anyway, I need to knock down my own mortgage first and top up pension plan...will address this again in future.
 
To answer your question, no we were not debt or mortgage free. I was 36 years old, my wife 32. We were about half way through the mortgage on our PPR. Instead of trading up to what we perceived to be a more desirable house here, we decided to have a holiday home that was easily accessible (< 5 hours drive from ferry ports and < 1.5 hours by plane), not too touristy or commercial (we are the only Irish people in our coastal town with about 3,000 inhabitants) and decent weather for 6 months of the year. Golf is not popular in the region we are in so I can't comment on that aspect.

Irish high street banks will not lend against any asset (including property) that is held in a different legal jurisdiction. The bank will want recourse against the security against which you are borrowing, so one would have to remortgage against an Irish based asset which is what we did. So in our case we just extended the term of our loan and kept the repayments pretty much the same.

The are a couple of things to watch for if purchasing property in mainland Europe that are different to purchasing in Ireland or the UK. Firstly, if purchasing through a real estate agent abroad, the purchaser pays the agent's fee. In Ireland the seller pays this seller's fee. In France certainly, this is an additional cost to watch out for... you need to ascertain if the window sticker prices states "FAI" which means the sticker price includes the agents fee. Additionally, there is a "stamp duty" equivalent due to the Notaire (conveyance solicitor equivalent) which is an additional cost not typically included in a real estate window sticker price (unless purchasing directly from a Notaire's office)... sorry if that's complicated to follow, but just ensure you are fully aware of all the costs involved. Many people prefer to purchase direct from the seller as it removes the agent's fee (roughly 6-9%).

To furnish the property, we just rented a van, drove to IKEA one Saturday morning and got busy assembling.

For us, it was a lifestyle purchase which I think has paid enormous dividend providing release from a demanding job. A pension is only of benefit if one survives to draw it. If you want any more detail please feel free to private message me as I am not sure this is the right thread for this particular topic.
 
Your post gave me a good laugh this morning RedOnion !

I would be more than happy to share our experience of purchasing and owning a holiday home in France if there are any questions... i'll keep an eye out for a new thread, should one be created.
 
gnf_ireland - you beat me too it, like you I'm was not sure what forum: -

please see new Thread -
Overseas Travel,Holidays,Hotels & Airlines
feedback-from-owners-of-foreign-holiday-property

Our questions were similar, on the same page! - but yours is more detailed...I'll delete my thread.
 
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