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Most overseas property investment for profit, says Assetz

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The majority of jet to let property investors consider rental income the main reason for buying overseas property, research carried out by Assetz has found. The attitude contrasts with UK buy to let property investment market, where only one in every 12 landlords considers rental income alone the main reason for entering the market.

Of the 50,000 investors and non-investors surveyed, 60 per cent said that rental income was the most important factor in their decision to buy property in another country. Twenty one per cent of respondents told Assetz that their property investment was intended as retirement home, with just 19 per cent saying that they used their property only as a holiday home.

"Previously there was a certain amount of stigma attached to renting a holiday home out on the open market, but today’s financially aware purchasers are more likely to be embarrassed by failing to make their investment work for them" Assetz managing director Stuart Law told website Fly to Let.

"There is tremendous benefit in being able to own a second property, use it for holidays, enjoy capital gains in most overseas hotspots and also generate an additional income in return. I also think there has been a move away from investors letting property cheaply to friends and family, as there's a growing realisation that it can have a major impact on returns, especially in high season," he added.

The returns to be made on holiday property have markedly reduced the long term costs of owning a second home and made it a viable option for many people who would not otherwise have been able to afford it, says Mr Law, with a whole new market taking off within the last three years.

"The second home revolution means it is no longer the domain of the rich, but also of the financially savvy who make sure their investments stack up," he added, saying the fact that over half of all owners, 54 per cent, spent less than a month every year in their second homes indicated the "commitment of purchasers to protecting high rental yields".

Government figures show that over half a million people in the UK now own a second home, a figure that is certain to rise following next Aprils Self Invested Pension Plan (Sipps) changes, which will provide up to 51 per cent subsidies to pensions linked property investment.

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