The Best Places to Buy a Holiday Home

The ‘Where to Buy: An International Holiday Home’ infographic by the holiday home insurer Schofields reveals the best places to buy a holiday home to achieve the highest return on investment. Many purchasers base buying a holiday home on being able to at least cover their costs by renting out the property when they’re not using it.

When you’re thinking about letting out your holiday home, you need to look at the property prices and the average rental income. This study compared buying a two bedroom house in a good area in five popular international tourist destinations; France, USA, Spain, China and Italy. The return on inestment was then calculated after 25 weeks, based on the price paid and average rental income.

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Catalonia in Spain offered the highest yield at 18.59%. I think that Catalonia is a great location for a holiday home for Brits. It’s accessible from the UK with lots of reasonably priced flights from all regions. If you live in the south of England, taking your car over is also an option. Then you can carry more luggage and be more mobile once you arrive in Catalonia.

One of my favourite locations in Catalonia is the city of Girona. I think that the best way to see the city is by walking along the city walls.

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Girona from the city walls

I also loved the coastal village of Cadaques.

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Cadaques by Pierre-Sellm

The second best rental yield of 16.70% is offered by Orlando in Florida, USA. I can see the lure of Orlando with the sunny weather and attractions such as Universal Studios and SeaWorld.

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Universal Studios Orlando by Lall

If you won’t be letting out your holiday home, then Orlando also looks like a top buy, with a property costing around £57,000. However, you’d have to factor in the higher cost of flights to the USA, as compared to Spain, from the UK.

Spain takes third place, with a 10.22% return on investment in the Balearic Islands, which include Ibiza, Mallorca, Menorca and Formentera.

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View from Puerto Pollensa in Mallorca

I do wonder if having full occupancy of a holiday home for 25 weeks is realistic? In my opinion, Orlando might end up offering a higher return on investment in the long term, as the letting season could last longer, mainly due to better weather outside the peak Summer season compared to Spain.

I think that you’d also have to be aware of service charges, local property and income taxes and letting agency fees on a holiday property, as these could seriously eat into your net profit.