Having Your Cake and Eating It Too: How to Make Money From Your Home Abroad
Above: Hummingbird Hall
There was a time when house-purchasers believed that the only way that they could generate money from their home was when it was sold or re-mortgaged. Luckily, this perception is changing and a growing contingent of suave home-buyers are considering how much money they can generate from a property, before deciding to buy it.
AIPP members and Luxury Property Specialists, Beatrice Rose and Associates, believe that a house is not a home unless you can make income from it. Although AirBnB and vacation rental typically spring to mind – they specialise in helping purchasers identify diverse ways that they can generate money from their international property purchase as they explain below…
Music video and film shoots
There are actually a myriad of ways that your overseas property can Take for example the currently-for-sale villa Hummingbird Hall in Jamaica, featured in the youtube link below. Although it is a luxury residence and vacation home – which can earn up to US$17,000 per week – it also generates income for the owners as a luxury, all-inclusive destination wedding venue charging between US$10,000 and US$30,000 per wedding! And its not just weddings, Hummingbird Hall has been used to host music video, photography & film shoots and group retreats from US$1,000 per day.
Whilst the owners also enjoy the property with their friends and family for vacations; the property completely pays for itself (and earns far more besides). This model is one that suave owners of property overseas, particularly in the luxury segment, would be sensible to follow.
Indeed, using a property to make money has many benefits, particularly for owners of second homes overseas. For one, it ensures that the property is used year round. It also ensures that the property fully pays for itself and offsets expenses such as Home Owner Association fees, land taxes, staff, up-keep and repairs. An income-generating property can also provide a lifestyle business, supplement a pension and add to the overall saleability of a home when it comes time to divest.
So what to look for when purchasing a home abroad with a view to making profit from it?
If marketing the property as a destination wedding venue is on the cards, look for properties in ultra-exclusive locations of outstanding natural beauty that are accessible via road and air. This means that properties in established resorts, with sizeable gardens or plots, incredible views, large decks and terraces and with interesting features such as infinity pools, gazebos and grand staircases certainly fit the bill.
Farming and glamping
If buying a town-house or city property, look for a property that has a parking space that can be rented out to commuters year round. Looking for a country home with land? Think about the possibility of renting land to farmers or as a glamping site. Purchasing a property with a barn or garage? Think about renting unused space to owners of boats, RVs or motorbikes.
Purchasing a home with an incredible gym, pool or garden? Think about renting the space to personal trainers or swimming teachers. Have an incredible library? Consider renting the space to tutors or students. Thinking of purchasing a luxury property with a basement or wine cellar? Consider the possibilities of converting it into a climatically controlled art vault and charging to store the high-end artwork of others.
Of course, permissions might need to be granted from a mortgage company, local authority, insurance company and more; but the options of generating money from a property are plentiful. Sophisticated buyers are well-advised to keep these options in mind when purchasing a property abroad.
Beatrice Rose and Associates is a boutique international real estate agency based in Covent Garden, London, that specialises in selling luxury residences worldwide to international buyers. Contact them via email email@example.com or call on + 44 (0) 203 868 8258 (UK local rate) or +44 (0) 7852 487 786
Choose your agent wisely. AIPP (Association of International Property Professionals) members have all signed up to a strict code of conduct and are covered by the UK Property Ombudsman which makes for a much safer buying environment. You can search their properties by clicking the ‘Search Property‘ link here or at the top of the page.
Know your budget before you start your search. The Alliance recommends using a specialist overseas mortgage broker such as AIPP member Simon Conn who can assess your current situation and advise on what kind of mortgage would be available to you.
Lock in your exchange rate. With the markets a little volatile, it’s wise to protect your budget. By choosing a currency company who can offer you the best rate and fixing it with a forward contract you need not worry about political or economic factors influencing your purchase power. The Alliance works with Clear Currency. Hear what they have to say:
Engage the services of a fully independent lawyer. Your lawyer should work on behalf of YOU and YOU only – not the seller or developer or agent. You can search for an AIPP member lawyer here.
Seek advice on your tax, pension and wealth management requirements. By speaking with a specialist you can ensure your financial affairs are in the best order to limit your liabilities and future proof your income. The Alliance recommends speaking with international financial advisers Blevins Franks.
Speak to those who have gone before you. Join the Alliance of International Property Owners and gain access to our private members only forum where you can search and connect with members with properties in Spain and other areas you wish to know more about (and right now it’s free to join!)