April 13, 2024, 5:28 am | Read time: 4 minutes
Owning a vacation apartment in a popular holiday region sounds tempting to many. However, such a venture requires some preparation. What should you consider when planning?
On vacation, it’s okay to dream a little: How wonderful would it be to own your own vacation home by the sea or in the mountains? The family could always go there when they need a break. And in the meantime, the house could surely be rented out to other vacationers. This is possible because new vacation homes and apartments are being built and sold in many holiday regions. Existing properties are also coming onto the market. However, anyone looking to buy a vacation home should consider some important points in advance, despite the romantic holiday mood.
Buying a Vacation Home–The Right Preparation
“No one buys a vacation home or apartment completely spontaneously,” says Julia Wagner from the Homeowners’ Association Haus & Grund Deutschland. “If only because it takes time to arrange financing and complete the purchase with a notary.” Prospective buyers should use this time to get a sense of the local conditions.
The following questions should be clarified in advance:
- What do I actually want with the vacation home?
- Who should use it?
- How many weeks a year can the family spend there?
- Should it stand empty in the meantime?
- Should it be rented out to vacationers?
Related: What to Consider When Buying Existing Buildings
Combination of Personal Use and Rental
“The combination of personal use and rental usually makes the most sense,” says Göran Holst, chairman of the German Vacation Home Association. However, one must be aware that renting out a vacation home is a business where private interests may sometimes take a back seat. “Anyone who always vacations in their house by the sea during the peak season in July blocks it and forgoes important income.”
As an owner, you should occupy the house at times when it would otherwise be empty. It would be ideal if the buyer of a vacation home by the sea loves the solitude of the beaches in winter, and the mountain enthusiast prefers hiking in the summer rather than skiing in the winter.
What Factors Play a Role?
As with any real estate purchase, classic factors such as location, connectivity, infrastructure, and size play a role in acquiring a vacation property. “However, buying a vacation property is more complex than buying an apartment,” says Göran Holst. You can already make a mistake with the location. “When it comes to returns, some think the more expensive and exclusive the house and location, the better. But that’s not necessarily true,” he knows from experience. “Houses on Fehmarn, which can be purchased and rented relatively cheaply, often yield a higher return than expensive vacation properties on Sylt.”
Tip: Inquire at Tourism Offices
He advises asking the regional tourism offices about the state of the local real estate market. You can also find out if renting to vacationers is even allowed in the community. There may be a rental or repurposing ban, informs the financial portal Biallo.de.
A look at the zoning plan of the community can also provide insight. If the area where the property is located is designated as a purely residential area, vacation properties are only allowed in exceptional cases.
Payment Only After Construction Progress
Additionally, it applies: “If the desired apartment or house is part of a condominium association (WEG), it may be that co-owners must agree to its use as a vacation property,” says Julia Wagner. A look at the declaration of division can provide clarity.
Caution is advised–as with any other real estate purchase–if the advertised vacation property is not yet completed. There is a risk that the project will be delayed or even fail. “Under no circumstances should you advance money; always pay only after construction progress,” says Wagner.
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Management and Cleaning
If the vacation property is not close to your home, it must also be clarified who will take care of it in the owners’ absence. If rental is planned, the property must be cleaned after each occupancy change. Searching through local ads or the vacation home association can help find management and cleaning companies in the area. The additional costs for cleaning and management should be factored in accordingly.
Conclusion: Buying a Vacation Home Can Be Worthwhile
“If you don’t just see buying a vacation home as a charming vacation idea for your own family, but also calculate it economically, it can be a worthwhile investment,” says Holst. “Although banks are more cautious with financing than with residential properties and usually require higher equity.” Nevertheless, it applies: “In a good location and with reasonable management, a vacation property can yield an attractive return.”
With material from dpa