1. Holiday Homes: can you have your cake and eat it?
John Howell
Editor & Founder of Guides Global

2. Agenda A bit about John Howell
Why buy a holiday home as an investment?
Will a holiday home work as well as a “pure” investment?
Where to buy?
What to buy?
How often can you use the property?
The impact of exchange rates
Don’t forget safety
Three real-life examples
Questions
Saturday, August 17, 2019

3. John Howell
Dealing with international legal and property issues for well over 30 years
Background as a Solicitor (English Lawyer). Now retired from practice.
Still provides some consultancy services to other law firms and a small number of private clients
Guides Global
Editor & founder of Guides Global –
Online written and video guides about how things really work in other countries
Writer
Author of The Sunday Times® Guides to buying a property in Spain, France, Portugal, Italy, Turkey, the USA & various countries in Eastern Europe
Author of the Cadogan Guides to Setting up a Business in France & Spain
Author of “Don’t Jump In”
Author of the two “International Law” volumes of Butterworths’® Encyclopaedia – a leading textbook for UK lawyers
Speaker
Speaker about international law and property at events around the world
Saturday, August 17, 2019

4. Why buy a holiday home? Lots of different reasons
For your personal pleasure – with no thought of making any money?
As a pure investment?
As a holiday home that will also earn you some money?
As a holiday home that will help pay its way?
All require a different approach
We are only looking at the third
Saturday, August 17, 2019

5. Will it work as well as a “pure” investment?
Probably not – at least if you use it yourself for more than a week or two per year
The importance of good property management
The importance of good rental management
Always expensive
The importance of self-help
Family, friends, neighbours, workmates
Keeping a close eye on your managers
Saturday, August 17, 2019

6. Where to buy? Depends upon where you want to have your holidays!
Depends when you want your holidays – weekends?
How much are you prepared to compromise?
Some countries generate more rental income than others
Some places perform better
Some locations perform better than others
The importance of travel times
Saturday, August 17, 2019

7. What to buy? Properties that “take a good photograph”
Huge impact on lettings
Properties that are the right size for their location
Properties with the right facilities
Properties that are good value
Location, Location, Location!
Saturday, August 17, 2019

8. How often can you use the property?
As much as you like – but the more you lose it the less money you will (usually) make
Confining your use to out-of- season
The May to September landlord
Confining yourself to last minute visits at times when the property is not let
Lateral thinking; a cunning plan
Saturday, August 17, 2019

9. The impact of exchange rates
Ideally, you want to buy in a place where the local currency is likely to go up in value against the pound
You generate more income in £ Sterling terms
You get more (in £ Sterling terms) for the house when you sell it
Hard to judge!
See for more about this important topic
Saturday, August 17, 2019

10. Don’t forget about safety!
Some countries are WAY more dangerous than others when it comes to investment
Political risks
Volatile currencies
Legal systems that don’t work
ALWAYS get legal advice when you buy your property
From a truly independent lawyer
Saturday, August 17, 2019

11. Three real-life examples
These are examples of successful, and not so successful, investments from my own personal experience as a lawyer advising thousands of clients
There is no one size fits all and what worked for them might not work for you!
Saturday, August 17, 2019

12. Marbella, Spain
Bought an apartment in a new development in central Marbella on 26 June 1996 for 19,500,000 Pesetas (=EUR 117,000) = £96,000
Value in 2007 (peak pre-crash) about €352,000
Value in 2010 (depth of crash) about €210,000
Value in 2019 about €425,000 = £326,000 = 236% increase in value
FTSE 100 on 26 June 1996 was April 2019 – = 94% increase
Rental return on original investment about 6.5% per annum average
Holiday taken about 6 weeks per year
Saturday, August 17, 2019

13. Yalikavak, Turkey
Bought a 3 bedroom villa in a new development in May 2006 for 360,000 Turkish Lira = £150,000
Value in 2008 (peak pre-crash) about 420,000 Turkish Lira
Value in 2010 (depth of crash) about 200,000 Turkish Lira
Advertised in April 2019 for £545,000 (the currency is so volatile, prices are expressed in £ Sterling or Euro) but almost certainly heavily negotiable = (on the face of it) 263% increase in value.
FTSE 100 on 5 May 2006 was April 2019: = 19% increase
Rental return on original investment about 2.5% per annum average
Holiday taken about 4 weeks per year
Saturday, August 17, 2019

14. Two centres – part 1
A lady – who disliked hot summers and skiing – bought a two- bedroom apartment in a new development in La Alcaidesa (near Gibraltar) in June 2006 for €147,000 = £100,000
Value in 2007 (peak pre-crash) about €160,000
Value in 2010 (depth of crash) about €70,000
Value in 2019 about €195,000 = £168,000 = 68% increase in value
Largely as a result of the fall in the value of the Pound against the Euro
FTSE 100 in June 2006 was April 2019 – = 26% increase
Rental return on original investment about 6.5% per annum average
“Holiday” taken about 35 weeks per year
Saturday, August 17, 2019

15. Two centres – part 2
The lady also bought a two-bedroom apartment in a new development in Bansko (a ski resort in Bulgaria) in January 2006 for €52,000 = £35,500
Value in 2007 (peak pre-crash) about €55,000
Value in 2010 (depth of crash) about €20,000
Value in 2019 about €32,000 = £27,500 = 22% loss in value
FTSE 100 in June 2006 was April 2019 – = 26% increase
Rental return on original investment about 4.5% per annum average
“Holiday” taken about 12 weeks per year – in the summer (when the weather is great for mountain walking and Bansko is a lot less crowded) – allowing the property to be fully let during the profitable ski season
Saturday, August 17, 2019

16. Two centres – part 3 Total investment: €199,000 = £135,500
Value in 2019 about £195,500 = 44% gain in value
FTSE 100 in June 2006 was April 2019 – = 26% increase
Rental return: about 5% overall per annum
Rental return = an extra pension of about £7,000 per year
PLUS she lives in these two properties all year round – except when visiting family in England and Australia
Saturday, August 17, 2019

17. Questions

18. Contact Details Address: John Howell Guides.Global Ltd
23 Bridewell Lane
Bury St Edmunds
Suffolk
IP33 1RE UK
Telephone:
From the UK:
From Overseas:      
Saturday, August 17, 2019