Buying vs Renting a Holiday Home Abroad | Tips from Staysure

The pros and cons of buying and renting abroad

Posted on January 13, 2015 by Guest Writer
Holiday Home living room

The need to own your own home runs deep in the British psyche, hence our national owner-occupier rate is amongst the highest in the world. For most British people, buying a holiday home represents added financial and emotional stability, especially if the property is held onto for a number of years. But in today’s slow property market, many people are starting to change their way of thinking, instead taking the example of our continental neighbours who have long favoured renting to buying.

Uncomfortable as the thought may be, the UK’s home ownership ideal might not always make financial sense. If you want an overseas home in the sunshine, then weighing up the pros and cons of buying or renting a holiday home might well reveal some startling realities.


Holiday home looking at the mountains

Buying a holiday home abroad

Supply and demand

Around 50,000 fewer homes are being built in the UK each year than we need, which drives prices up. This is a bonus in today’s sellers’ market, but buyers are not always forthcoming due to the current lack of lending. This shortfall in supply is not the case in many countries, such as Spain and Portugal where the British are keen to buy, while cultural instinct often keeps the locals from purchasing.

For bargain hunters, buying holiday homes and insuring them abroad can represent great investment returns in the long term, provided the property is bought at the right price and located in an area of relatively high demand.

A false market

In some parts of France and Spain, British buyers outnumber local buyers who prefer to rent instead. Those who do own property typically live in homes that would not appeal much to overseas buyers. In this way, foreign and local buyers have created markets of their own, which have little resemblance to one another. It’s a good idea to watch this carefully in order to avoid the dangers of overpricing to foreigners, as well as issues of illegal land ownership.


It’s easy to be blinded by the prices, convenience and security of shiny, newly built units on a development with numerous amenities. Many people also find it very convenient to lock up and leave or rent out their properties when they are not there.

Watch out that you are not paying too much for your newly built property and look at the prices of any similar re-sales on the same development before you buy. This will give you a good indication of the going rates and how much you should actually be paying. Remember to consider the costs you may be obliged to pay to a management company for facilities such as a modern gym, tennis courts and gardens as well to a rental management agency if you plan on letting out your unit.

Buying and selling fees

Local taxes, stamp duty and notary fees can mount up to far more than you would pay in the UK. These need factoring in when you consider purchasing a property abroad. In some countries like Italy, fees can add 10 per cent to your overall property purchase. And you can expect to pay between three and five per cent for estate agency fees, as opposed to the moderate one and a half per cent common in the UK.

A slow property market

Being stuck with the cost and hassle of a property you no longer want is trouble enough in the UK, let alone overseas, when you might be relying on a peak season only to attract interest in your property. Unless you are lucky, in a slow market you will need to be prepared for long delays before you find the buyer you need.


luxury condo chalet whistler

Renting a holiday home abroad


The idea of returning over and over again to the same holiday destination may not appeal to everyone. If this describes you, then renting a property in a different place each year could be a better alternative. Renting gives you the chance to stay in the types of places you might not live in yourself. A rental fee buys you the chance to live like royalty in luxury villas with pools or in a penthouse in the city; alternatively, you could live like country-folk on beautiful farms or fincas (typical Spanish country homes) – the choice is yours each year.

Hassle-free holidays

If paying large sums of money to builders or spending hours up a ladder doing maintenance jobs is not your idea of a relaxing break, then a holiday rental could give you the real getaway you are looking for.

Freedom to move

Many people move abroad with every intention of staying there but the average stay for a Brit to live overseas is just six years. Despite intentions, overstretched finances, health issues or missed relatives can often mean they reverse their decisions years later. Unable to sell up and move on, many owners are left waiting for a buyer, meanwhile paying costs for a property they no longer want.

Rental prices

Compare the cost of renting a holiday home as opposed to buying one and paying its ongoing annual costs and you will initially see a clear financial advantage. Rental fees are generally lower in Europe than in the UK, with two bedroom holiday apartment rented out for an average of £350 per week, while in Spain a two bedroom apartment on the Costa Blanca averages around £210 per week.

Conversely, as an overseas home owner in a high demand area, you may be able to cash in on a healthy rental market to help pay your costs and add to any profits you receive when you finally sell up. Be very careful to research the rental market first to make sure there is not a surplus in supply of your type of property in your area and if you can’t find the right property, then renting is always an option.

Rent and reconnaissance

Erring on the side of caution might be prudent in today’s property market and keeping your ear to the ground for good deals is often the best way to find the right property. Renting a holiday home for a few weeks is not only cheaper than staying in a hotel, it enables you to research at your leisure, without making brash decisions – so you can make the right decision on whether or not to buy.

This information is non-advisery and merely meant as a general guide to buying or renting holiday homes abroad. For professional advice, please consult a qualified real estate agent.