Holiday Homes

Exclusive financing solutions for the purchase of a holiday home as a capital investment or as a second home.

Holiday Homes and Holiday Properties

Buying a holiday home is often based on a personal preference for a particular holiday location or as a combination of the property as an investment as an investment property at home or abroad. finbird offers suitable financing options for different locations and occasions.

Mortgages for Holiday Homes

A holiday home or vacation rental is often purchased when the owner wants to use the property for personal use, as a second residence or for temporary rental purposes in the holiday location. The main difference between real estate financing for holiday homes and normal real estate financing for residential homes at the permanent place of residence is that banks and financing partners usually place higher demands on the financial situation and down payment of the borrower. Loans for holiday homes are often granted to private individuals who want to buy vacation properties in high-quality locations that are known as holiday resorts or popular vacation spots.

Another advantage of a holiday home is the opportunity to generate rental income with the property. A holiday home can be a source of passive income and thus a good diversification of a real estate portfolio. This income can be used to cover interest rates and loan repayments, as well as management and maintenance costs, if applicable. Depending on local laws regarding real estate ownership and second homes, financing a holiday home can also bring tax benefits.

Financing Cases

A customer took out a loan to purchase a vacation chalet in the Bavarian Alps. The challenge was determining the value and raising the large purchase price due to the property's prime location. The property value could not be determined using the usual tools, but required an external real estate appraisal. By using a higher equity ratio, a local bank was able to successfully support the project.

A customer bought a house near the North Sea and took out a loan for this vacation property. Some of the initial hurdles included taking out adequate and necessary insurance due to the local risk of flooding and determining the value of the property. The house is used several times a year by the customer and his family for private stays and is rented out to tourists during the season.

A buyer purchased a remote forest house to serve as a summer residence. The house's remoteness posed a challenge for financing because the property was classified as a special-purpose property, whose actual value had to be individually determined by an appraiser before a loan could be granted. Once the valuation was complete, the house still needed to be modernized before the buyer could move in and regularly enjoy the home as an escape from city life.

FAQs

How does financing for a holiday home differ from normal financing?

Unlike real estate financing for owner-occupied housing, financing used to purchase a holiday home or vacation rental is specifically intended for homes in vacation or holiday locations. This may affect the loan terms, but is usually accompanied by higher equity requirements. A bank must also verify that a borrower can afford multiple loan payments for different properties.

What are the advantages of buying a holiday home?

Buying a house or vacation property offers the owner a personal retreat as well as potential rental income if the vacation property is not used exclusively by the owner. Investing in homes in vacation areas can be a successful investment if the location is well chosen and is a popular tourist destination, thus ensuring demand, which can positively influence the value of the vacation apartment or holiday home.

How can I get a loan for a holiday home?

To obtain a mortgage for a holiday home or apartment, lenders typically require a good borrowing capacity and a stable income, but also a higher down payment than for real estate financing for owner-occupied residential property. As part of our initial consultation, we will review specific financing options for your real estate project at your preferred vacation spot.

What should an investor consider when buying a holiday home?

When considering this type of investment, investors should ensure that the location of the property is attractive and in demand and that the costs associated with property ownership in holiday locations, such as financing, maintenance, insurance and property tax, can be covered by rental income. It is recommended that you conduct research and analysis of rental potential at the respective holiday location in advance.

How does a holiday home affect taxes?

Vacation properties can have an impact on the owner's tax situation. You should have the deductibility of loan interest and depreciation checked and find out about your obligations to declare and pay tax on rental income in connection with your vacation home or holiday home. A tax advisor specializing in real estate can provide you with comprehensive advice here.

What risks should you be aware of when buying vacation properties?

Risks include the financial burden of multiple loans, possible unexpected market changes that could affect property values and ongoing costs of vacation properties, and the demands of managing a vacation rental or vacation home remotely.

Can I rent out my holiday home when I'm not using it myself?

Many owners rent their vacation properties when they are not using them to cover their mortgage and property management costs. In this context, you should inform yourself about local rental laws at an early stage and familiarize yourself with any potential effects or restrictions that may apply to your vacation home.

What should I consider when choosing a location to purchase my vacation properties?

Before purchasing a home in a vacation destination, consider the local infrastructure, the cultural and leisure activities on offer, the general attractiveness of the location, potential rental income and potential for appreciation. Choosing the right location for your vacation properties can make a big difference to both your personal enjoyment and your long-term returns.

How can I manage a home that is far from my primary residence?

Managing a home away from home requires planning. Consider hiring a property management company to take care of maintenance and guest management if you plan to rent out the property. A professional local network can help here, providing on-site support with management, new rentals and checking incoming rent, and keeping vacation properties in good condition.

Financing Process

The process of finbird begins with an in-depth consultation to understand the customer's requirements and preferences for purchasing a holiday home. We review the financing options that are relevant to you and advise you on an optimal financing concept for the purchase of a holiday home. Although we primarily focus on the financing process, we have access to an extensive partner network at popular vacation spots in Switzerland and abroad, so we can also connect our customers with trusted experts. These experts advise on the legal and tax aspects of property purchases at vacation spots or abroad.