Owning a holiday home: three investors tell how it worked out for them
Owning a property in a foreign country is a major decision - but three investors who took the plunge explain why it has worked out for them
You wouldn't buy a cow when milk is so available - so why buy a holiday house when rentals abound?
While it's tempting to want to own your own piece of a favourite location, it's not always the smartest investment decision.
Running costs may be higher than you expect. There may be tax implications - and if you count on renting it to strangers as well, good luck with that.
So what's the attraction? We asked several Hongkongers what led them to own their own property in a foreign land - and what the experience has taught them.
While living in Hong Kong, Australian teacher Jolanta Karczewski frequently holidayed at the Balinese seaside.
When schools were closed for a week during the Sars outbreak in 2003, she went to rural Ubud "for a change" and met a fellow Australian who told her his story of building a home there.
"I was mildly interested, but never in my wildest dreams did I think that I would ever build in Bali," she said.
There was no more land available in the area - and besides, foreigners can't own land in Bali.
But they can lease land, and Jolanta began thinking that a holiday home for now could be a retirement home in the future.
When a block became available among the Ubud paddy fields in 2009, Jolanta negotiated a 20-year lease for around HK$50,000 and engaged a Balinese architect, Komang Perwata, who would design, build, and manage the project.
Her property, Mimpi Bali, which means Bali dream, is an open-plan house of rendered block with no ceilings, but high exposed beams. "The architect sent me weekly photos of the construction. As this architect works mainly on commercial builds such as schools, museums and restaurants, he has gangs of tradesmen that move from one project to another.
"So, unlike many houses in Bali that take forever to build and are not always of a high standard, my house was finished in record time and the workmanship is of a very high standard," she said.
The building process took only six months. Jolanta was concerned about the language barrier, but found that her ideas "translated well in pictures and drawings, and the detailed plans the architect provided spoke for themselves".
For HK$1.25 million, Jolanta has a main house with a master bedroom, garden bathroom, open kitchen/dining room spilling out to the 13-metre swimming pool, and a veranda overlooking a ravine. She also has two separate bungalows with garden bathrooms for visiting family and friends. Her overseas guests "look after the place while I am away", contributing to the expenses.
"So yes, it is possible to build your dream home in Bali while living in Hong Kong," said Jolanta. It's cheap to build and cheap to live in Bali, but the best part? "Not a high-rise in sight and blue, blue skies!" she added.
Eddie and Chi Guillemette, an American/Australian couple, bought their first holiday apartment in the ski fields of Niseko, Japan, in 2005 because, at the time, there was no suitable rental accommodation.
"I was sleeping on the floor, with no heating," Chi recalled of their early visits. When babies came along the couple soon outgrew the apartment and upgraded to a house of 1,700 sq ft, plus decking, which they built in Niseko Country Resort.
Foreigners can buy land freely in Japan, so there were no entry barriers. But Chi had this advice - don't build while pregnant.
"Taste goes out the window," she said. "I insisted I wanted a yellow house, which the architect (Nishio San, then of the firm Toshikuukan Sekkei) talked me out of - and then I wanted barn red" (another idea the architect successfully toned down).
The resultant home, built in 2008 in contemporary alpine style, is a two-storey design finished in natural cedar, with double-glazed windows and highest-grade insulation.
It was completed in 100 days at a cost of about US$700,000. (Builders finish on time in Niseko because they have a short window in summer before the snow arrives, Eddie explained).
Its three bedrooms, three bathrooms, a playroom and garden work well for a young family, but now they are outgrowing that, too, and the couple are working on plans for a new one.
They don't rent it out, but Eddie said: "Having our own place that we use for so much of the year (three months) gives us roots - a home base - even though it is a holiday house."
Mark and Angela Mowday, an Australian/Chinese couple, head for their custom-built holiday house in North Pattaya, Thailand, once a year. They had hoped it would be more often, but both are too occupied with their own businesses. The rest of the year they rent it out, with "fairly consistent" occupancy.
The developer's management company handles all bookings, maintenance and cleaning.
In Thailand foreigners usually buy condos, which is an easier path through the restrictions on land ownership by non-Thai nationals. The Mowdays, however, wanted a house, for the space and privacy it affords.
By purchasing through a local developer (Nagawari in Pattaya), it enabled them to build on land leased for 99 years on a peppercorn rent, much as is the case in Hong Kong.
The house of 4,000 sq ft has five bedrooms, four bathrooms, a pool, a Thai gazebo, a jacuzzi, a self-contained guest suite and sea views. Building started in 2007 and took 18 months - a year longer than expected.
"Nothing went wrong - it was just slow," said Angela. "We didn't know that Thai builders take holidays from January to March. I also had to fly over before they would start works - they wait for instruction."
The language barrier made it hard for the couple to communicate their ideas, but in the end they are "very happy". Angela said: "For the money (HK$2.2 million), it was worth it."
As a financial adviser, Angela also sees the investment value. Capital gain was one of the drivers for buying in the first place, and despite market setbacks such as the global financial crisis and Bangkok flooding, the couple are satisfied with the rental yield, which is "pretty much" as the developer said it would be.
All three investors interviewed for this story said the experience of building a holiday house in a foreign country "worked" for them.
But all passed on the same advice - use an architect/builder who comes recommended and who has built properties in the area previously.