Are Vacation Homes in the Sun Still Offering High Returns by Vacation Lets?

 

Between 2000 and 2004 while interest rates were low in the UK and low in Europe, thousands of UK homeowners invested in a vacation homes in Europe. This has had a seriously negative effect on 'Vacation home lettings'. Firstly there are now thousands more vacation homes advertising and competing for the same market but secondly the number of families looking for vacation villas to rent has dramatically reduced because they now have their own villas.

 

Paul Smith who has been letting his villa in 'Moraira - Costa Blanca' for 19 years has noticed that over the last 3 to 4 years it has suddenly become harder to fully let his villa and some of his apartments.

 

"For years we have been fully booked from March to October with the most of the bookings being taken by December of the previous year. Now we are struggling to get fully booked between May & August and are still taking bookings during Spring of the same year!"

 

Reflecting on the statistics and feedback from the villas owners advertising on his 5 year old web site, Marbella Villas, Paul said 'most villa owners are having an even harder time than us. We are fortunate to have a villa with exceptional sea views and this has helped keep our bookings higher than average. Where villas are in secondary locations, their bookings have dropped off drastically. So badly, in some cases villa owners have either sold their villas or put them on the market.

 

Vacation property developers with a finca in mallorca are still encouraging buyers to invest with the promise of 'high returns' by letting. I still believe buying a vacation home is a great investment, because if careful you can enjoy your investment whilst making a reasonable return. But my advice would be to be very cautious about forecasts of high letting incomes. If you want a good letting income invest in a high quality property with a number one location overlooking the sea in a sought after area.

 

These properties are likely to cost a lot more but will always be likely to increase in value. As always it is location, location, location.  Some of the most beautiful parts of Europe are in Mallorca where some bargain Mallorca property can often be found.