How to Afford Your Dream Home
by Rhiannon
Williamson
Is it your dream to one day own a holiday home in the sun or in the
mountains; a beautiful house where you can escape, relax and be free
of the worries that seem
to go hand in hand with every day life?
Well, you’re not alone!
A recent survey by a well known mortgage lender in the UK revealed that
up to one in three Britons not only dream about owning a home in the
sun but fully intend to make that dream a reality some day. And in the
US the number of Americans planning to one day buy that ideal second
home haven is now up to three in ten people.
Now let me ask you another question: -
If it is your dream to ‘one day’ own that beautiful home
in the sun or a mountain cabin what exactly are you waiting for?
Why wait for ‘one day’ when you can make your dream a reality
today?
Here are just five simple ways that could free you up to make your ideal
property purchase today.
1) Location, Location, Location
There are still some very beautiful and highly affordable locations
left in this wonderful world of ours – destinations that are less
well known, less popular with tourists, less well developed maybe; but
no less beautiful, no less welcoming and certainly no less safe!
You just have to look a little further afield or think outside of the
box and be prepared to do some of the real estate research yourself.
The most popular destinations for second homes like Florida and Spain
are very well documented and there are literally thousands of real estate
agents to help you find that pricey holiday villa or apartment.
But if you want to be able to buy up something that doesn’t have
such an inflated and unachievable price tag then look to less well marketed
and tourist populated areas – find the next emerging market.
Did you know that property in Northern Spain is a fraction of the price
of property on the Costa del Sol, property in Northern Belize is a fraction
of the price of property in the Cayes and property in central France
is a fraction of the price of property on the Cote d’Azur for example?
Did you know Croatia and Bulgaria have beautiful summer climates and
stunning beaches?
Be a proactive pioneer and seek out the most affordable and desirable
holiday home hotspots and make today’s budget go that much further.
2) Jet to Let
If you need to borrow to finance your property purchase consider buying
an apartment, villa or house that can easily be rented out during the
peak season in your dream destination. The weekly rental income you can
generate from your property purchase will pay off the extra money you
had to borrow to buy your dream home now rather than waiting until tomorrow.
Once the peak season is over and you’ve generated the highest
rental yields possible you can free up the home for a couple of weeks
and you can take time out to travel to it and enjoy an out of season
break in your very own dream overseas home.
Once the holidaymakers who let your home have helped you pay off your
mortgage you can either continue to take an income supplement from the
property or refuse to rent it out and have it all to yourself – either
way, jet to let is the latest way to afford that second home overseas.
3) Pool Resources
If you and your friends or family members all share the dream of owning
a second home overseas you could consider pooling your financial resources
together to get on the second home property ladder.
This will enable each of you to make your financial contribution go
so much further - and if you draw up a contract between you all at the
start which details who can have access to the house during which weeks
of the year there will be no possibility of arguments later on!
4) Get a Fixer-Upper
Many first time buyers in the local market consider buying a home in
need of repair, renovation or just a cosmetic overhaul. It’s a
well known fact that homes in need of some TLC get sold far cheaper than
perfectly presented show homes. Well, the same applies in every house
market regardless of where in the world you’re looking to buy.
Therefore spend a little time learning about the local real estate market
in your preferred country, find out about average costs of houses and
then look for homes priced under this ceiling…all of them will
be priced down because they require work.
Always make sure you get a survey done on any home you’re interested
in to ensure you’re fully aware of the work required then get building
quotes etc., and cost the work up – obviously the more work you
can do yourself the less money it will cost – and then go get yourself
a fixer-upper and use some of your holiday time turning your second home
into your dream home.
You will be amazed at how well you can potentially push up the value
of a second home by taking this path – in many countries overseas
run down homes are undervalued because local people have no desire to
take on the work. If you put in the effort and turn the house around,
when you want to sell it you will probably be handsomely financially
rewarded!
5) Release Equity
If you have equity in your principal home – i.e., your house is
worth more than the mortgage you have on it – you could consider
re-mortgaging to free up this equity and you could then use this equity
for a second home purchase.
There are some major considerations to think about before taking this
path however because it involves increasing your debt ratio. On the good
side you can often reduce your overall mortgage interest rate when you
re-mortgage and you will be putting the money you free up straight back
into property.
On the bad side you will be increasing your debt and your loan will
be secured on your primary residence. This option can suit many people
but you should speak to a financial adviser before taking this path.
Hopefully these five simple ways have given you some food for thought – there
are many ways to stop putting off until tomorrow that dream that you
could be living today.
Why wait until you’re too old to enjoy a home before
you buy one!
I would like to thank Rhiannon Williamson,
a freelance writer whose many articles about buying investment
property
abroad
have appeared in real estate and financial publications around
the world. To read her latest articles about property investment
in Cyprus visit this link:
Property
in North Cyprus
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