For many people, owning even one property is beyond their financial reach, but if you are lucky enough to have a second home, whether it came to you via an inheritance or you invested your savings in property, it is important that you make the investment work as hard as possible. If you don’t, you won’t ever realise its true value. So what is the best way to earn money from a second home?
As long as it is well-maintained, property rarely loses value. In fact if you invest in an up and coming area, you stand an excellent chance of making a decent capital gain if you hold on to the property for a long time. But leaving a property sat around empty on a permanent basis is never a good idea. They tend to attract undesirables and more often than not are vandalised. So if you don’t want to live in the property, what are your options?
Some people buy second homes in locations they enjoy visiting for holidays and short breaks. This often works out well if you like to get away regularly, or you have a large family who will be happy to make use of the property. But if you don’t envisage being able to escape for more than a couple of weeks a year, investing in a holiday home doesn’t make much sense from a financial perspective and you would be better spending your money on a time-share.
Second homes can be rented out, thus giving you a steady income. Short-term holiday lets are ideal for properties located in attractive places where tourists are likely to be looking for accommodation. Properties in university towns and cities could be ideal for students.
If you own a property in a rental hot-spot, there will be plenty of demand for accommodation, so it shouldn’t be too difficult to find a tenant. However, if it was that easy, everyone would be doing it, so rest assured that renting out a second home is not a decision to be taken lightly. For one thing there is a lot of legislation to be aware of, and for another, it can sometimes be difficult to find a suitable tenant – i.e. one who pays the rent on time and doesn’t treat your property with absolute contempt.
Health and safety is an important consideration: all rental properties must have smoke alarms fitted as an absolute minimum. Larger properties will need more sophisticated smoke sensors and ventilation systems (check out tealproducts.com for more information), and if you plan on splitting a larger house into smaller bedsits, there are many rules and regulations you must abide by.
In summary, although it is sensible to look into renting out a second home in order to generate income and prevent it from being empty for long spells, don’t rush into the endeavour and make sure you do lots of research first. That way you won’t get your fingers burned.