If you love to travel and consider yourself nomadic by nature, and you want to earn an income from this self trait then you may consider investing in holiday homes. They will give you joy, money, and a hobby that will keep you engaged long after the affair with a job, ends.
Let those who wish have their respectability- I wanted freedom, freedom to indulge in whatever caprice struck my fancy, freedom to search in the farthermost corners of the earth for the beautiful, the joyous, and the romantic.
― Richard Halliburton
When I and my wife were in our early 30’s, we made a pact. To retire from our day jobs at 40 and run a Bed and Breakfast business on an exotic island somewhere in the world. I was not so sure about the B&B part but the rest I was all in for. It was our romantic dream in a drawer. We called them our house hunting holidays. We would identify islands, cities, and countries that we wanted to see with the underlying intention of finding a holiday home that we could buy, refurbish and then let out to tourists when we were not living there. This was our retirement plan.
At that time we had no idea how to make this real.
But intense intentions have a way of coming true. Fast forward 15 years and now we have a beach house in Seychelles that we visit twice a year and for the rest of the time we rent it out to nomads like us.
So what were our tools to chisel this reality?
1. Book house-hunting holidays into your diary
Make it a habit to travel at least three times a year. I know Covid is a drag on these goals but the vaccine will work and the world will move on. Get back on the trail and book these holidays. Go to the place and walk around the neighborhoods and speak to the locals about the prices of houses in the area and if they sell them to foreigners. Get a contact of a few estate agents from the local newspaper or ask the local restaurant owner.
We bought our Seychelles home by telling the bartender at our hotel in Seychelles that we wanted to buy a home on the island. He spread the word and the fisherman who came in a boat to sell us fish offered to sell his three-bedroom house on the beach to us. The house came with 2000 sq meters of flat land and the ocean was 20 steps away. The house needed a new roof and new bathrooms and kitchen. But the rest was perfect. True story.
2. Buy the house to have an adventure for yourself first and then because it will give you rental income.
Sometimes the desire for rental income can decide on a holiday home purchase into a cul de sac. You end up owning something you don’t want to live in. First, fall in love with the place and the house and then figure out how to make it rent-worthy. We bought the Seychelles place because it had perfect weather that meant no hurricanes and sunny all year round; had a south-facing front garden(important if you want to have sun all day long in your garden); was very peaceful and was a blank canvas for us to renovate and surround with a garden on the land that came with it.
3. Get literate on how to get in and get out of the property market.
We bought the house for 180,000 Euros in 2011. The buying process was complicated. It was a cash purchase. It was all our savings then. But we were young and had many years of salary income ahead of us, so it was like investing in a stock market. A high-risk investment with a roof and a sea view.
Before buying in a foreign country read up on the taxes and rules of purchase. Make sure you have the right to rent the house. Check what capital gains tax you would pay on the eventual sale of the property. So have an equal mix of realism and romance when you get into the deal. But get in to stay with the deal for at least a dozen years, if not more. We have owned our place for just over 10 years and we intend to keep it for another 10 years. The place is now worth over 700,000 Euros (4 times its original value) and we think the place will be worth a million by the time it’s time to sell it.
4. Make friends with a builder and get a caretaker.
Once you buy the place immediately get a caretaker to start looking after the land and the house. The toughest part of owning a foreign property is the vandalism/ wear and tear that you don’t expect. We, for example, had a termite attack on the house and ended up having to change the roof after owning the house for 3 years. But the roof needed to be changed anyway when we bought the house and this problem just accelerated the decision. The house is better off for it. The caretaker is like an insurance policy on the house that is well worth the money. Get an insurance policy as well. It will come in handy if you have a break-in or a tree falling on your fence type incident…something that one can expect in tropical islands in the middle of the Indian ocean. The builder friend contact here is invaluable. They become an added leverage when you are away, to look after the running and repairs that will always occur suddenly and without any warnings. The builder, if trusted and friendly will be your biggest asset in protecting your love shack.
5. Become a host on a platform like Airbnb
Airbnb is a lifeline for people like us who own offshore assets that need a global marketplace to gain high-quality clients. It’s very easy to create a listing on this platform and start managing your booking price, schedule and offers. We don’t need any local estate agents or local tourists. We decide what kind of tourists can stay in our home and we are booked for over 100 nights a year. We keep our own bedroom locked and offer the rest of the home. The caretaker plays the role of the check-in and check-out manager and also looks after the sightseeing needs of the guest when they arrive.
The added benefit of keeping the house as a holiday home is that it gets looked after and cleaned and stocked with all the conveniences that we would also need when we are there. We don’t make a lot of income from this rental business but it helps us cover all our costs and leave us a small income for adding value to the house and improving the garden and outdoor areas.
Coda:
Owning a home away from home can feel daunting, but if you have the nomad in you I am sure it is something you will get a hang of very quickly. It has made our life so much richer for the travel and the people we now know because of the place. It’s taught us how to feel at home anywhere in the world and feel independent about our choices as we get older. I wish you the same freedom.
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This post was previously published on Medium.
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