Buying a second home as capital investment

A holiday home as capital investment

According to the German newspaper Die Welt, more and more properties serve as direct capital investment. Most German buyers purchase locally for this purpose (also see our Holiday Property Market Report 2017). But buying a second property also has other benefits. Apart from it serving as a long-term capital investment, many middle income buyers also see a second home as an immediate source of income. Three out of four holiday home owners buy with the intent to let their second home temporarily or permanently.

There are many good reasons for this. On the one hand, an occupied property increases security. On the other hand, the rental income can be used as additional income or to refinance the holiday home. The price of the property also plays an important role for the new home owner. The more expensive it is, the less the likelihood of immediately finding tenants.

Andorra la Vella - 3_080118_ES_Mallorca_W-023U26_03.jpg

A holiday property as retirement income

However, a holiday home also meets other capital investment needs: Apart from the immediate income from rent, one of the most important reasons for buying a second property is retirement security. The low interest rates at present serve this purpose well, as they facilitate property financing. In this way, buying a holiday home can also provide financial security for the future in addition to the state pension. With regard to potential income, keep in mind that the demand for private accommodation is rising more than the demand for hotels.

The higher the price of the property, the more time the owners will spend in the holiday home as a rule. According to a study by FeWo-direkt, cheaper properties are generally purchased by households with a lower net income and then used as a source of capital to generate passive income from rentals. These are rarely used by the owners themselves, on average only three weeks per year.

Andorra la Vella - 5_080118_ES_Mallorca_W-00AB30_01_Chameleon_6004931v2.jpg

Who buys where?

In the German market, more than half of buyers are buying a second property in Germany. These properties are spread across various regions that are considered particularly attractive. If second properties are purchased abroad, then most often in Spain and Italy. The cheaper the property, the higher the likelihood of it being located in Germany.

For foreign buyers, achieving a rental income or using the property as capital investment is just as important as using the property for short holiday trips. This second aspect is especially important for buyers living in urban conglomerations.

All in all, holiday properties are much more versatile that one would generally expect. If you keep in mind that not every buyer wants to use the property for holiday purposes, you will gain a better understanding of how the property market works.

Exceptional townhouse with garden in La Massana

Andorra, La Massana, Andorra
Buying price 1,600,000 EUR

Engel & Völkers

C/ Na Maria Pla 2-6
AD500 Andorra la Vella
+376 88 66 88

To the shop

Offer A Property

Yes, I would like to have my property valued by Engel & Völkers free of charge and with no obligation.

Declaration of Data Protection

When using our website, you expressly consent to the registration and use of data described in this statement. Your data will be used for the purposes described below.

IP addresses

IP addresses are required for problem diagnosis, website administration and demographic information. When you visit our site, we recognize only your domain name in any case your e-mail address. Just see your email address if you provide us directly through a form or send us an email.


Cookies are used to personalize content, to avoid repeated introduction of passwords or information provided to adapt to the preferences of the user.User registrationOur website contains forms that can be filled to request information. When you register, we will send the requested information.

Email Address

If you provide your e-mail address, we will contact you by email. Do not provide your email address to third parties outside Engel & Völkers. If you no longer wish to receive our e-mails, you can give unsubscribe at any time.Links to other websites Our website contains links to third-party websites. Engel & Völkers is not responsible for protective measures or data content from other websites.


If you no longer wish to receive emails of Engel & Völkers can revoke previously granted permission at any time. The email notification is sufficient for your e-mail is deleted from the list or database web log.

    [EUNDV] => Array
            [67d842e2b887a402186a2820b1713d693dd854a5_csrf_offer-form] => MTM5MjE5NzU3NkJ4d29xancwTDVhZWFIRzEycXAxcW9SdElHdVBqMTdV
            [67d842e2b887a402186a2820b1713d693dd854a5_csrf_contact-form] => MTM5MjE5NzU3NnlHcUR0Y2VlTXVPUndLMHZkMW9zMnRmRlgxaUcwaFVG