JULY 2021 | THE HAYEK GROUP MONTHLY NEWSLETTER
LEBANESE VACATION HOMES – AN INVALUABLE ASSET
If you go to your favorite search engine and type the words “Lebanese vacation homes”, you get more than a million results in a matter of seconds. A chalet for rent with a private pool, a luxurious Airbnb with a view, a beautiful two-story villa; the options are many. Lebanon is one of the very few countries in the area that is characterized by a snowy winter and a hot enjoyable summer, as it is known for its unique mountains and mesmerizing beaches. As a result, every year, airplanes coming to Lebanon get completely full of expats and tourists wanting to spend their vacations here. Not only do Lebanese expats come from different countries from the Middle East, Europe, America, and Australia, to spend their winter or summer breaks in our breathtaking country, but also people residing in Lebanon decide to take their vacations during season breaks and migrate to houses either in the mountains or on the beach and spend some quality time away from work and the hassle of cities. This is a yearly tradition that keeps happening season after the other, no matter what the situation is. Some people even take short holidays during their standard ‘work year’ and decide to move to their vacation homes for a few days and take a mid-year break to relax for a while. Therefore, the real question residing here is: How important is it to own a vacation home? Is it considered a good investment? Will the person be putting their money in the right place when investing in a vacation home? To make a long story short, the answer to these questions is simply YES.
A Historical Overview
To begin with, let’s go back to the origin of the entire idea of vacation homes in the Lebanese mountains. During the 20th century, the whole concept began spreading, with residents of villages, residing in their homes throughout the entire year. They were raised in their villages, they received their education there, and worked all year long in order to provide a decent living for their families. After World War II, specifically in the 1950s, everything changed. Villages were no longer able to provide these services for their residents, and they had to migrate to coastal cities in search for education and work opportunities. Meanwhile, Beirut was turning into a hub of culture and tradition and started growing until it became the “Paris of the Middle East”. The coastal stretch attracted people from villages who sought after the great opportunities that were provided in the capital city and its suburbs. What’s important to note is that people who migrated from villages did not sell their village homes back then, nor did they decide to abandon them. They simply kept their property in their distant green and serene villages and worked in coastal cities.
Soon enough, they were able to invest in city houses, in order to avoid going back and forth every day, and then practically moved their “mid-week” life to the city. What is insanely remarkable about this is that these people did not lose their village spirit. So, they had the luxury to live a dual lifestyle, between the urban city life, and the traditional village life. This point made people residing in the cities more eager to visit the most famous mountain villages, and they also wanted to have this luxury and profit from it. And this is how the whole idea developed. Lebanese people were soon encouraged to own two different homes in two different areas, which brought them closer and made their bond stronger. Today, almost 70 years later, this beautiful tradition still resides more than ever, and the number of Lebanese people who own “vacation” homes either in the mountains or on the coast is growing by the second.
An Investment Appetite
Investing in a Lebanese vacation home in famous mountain villages or on the enchanting coast is not only financially profitable, but it is also mentally beneficial. Let’s paint a little picture: imagine the scenery of the wonderful Lebanese landscapes, on the road that leads up to the famous village ‘Bikfaya’ in Mount Lebanon, filled with dancing trees and a lot of greenery. Or think of the mindblowing scenery of the wavy crystal-clear beach in ‘Jiyeh’ in South Lebanon. How calm and relaxing would it be? These are two small examples of the most renowned locations for vacation destinations in Lebanon. The relatively small total area of the Lebanese lands makes it easier for people to migrate through the country.
They can spend the day on the coast, then decide to move to the mountains for dinner and a night-in, and this is what gives an extra value to these homes. In the middle of the ongoing crises that have been hitting our country, a lot of residents find peace in their properties, which they describe as “invaluable”. You can’t really put a price on a relaxing shelter, located in a marvelous distant location, giving you serenity and peace of mind, can you? This is what we really call a “home away from home”.
On the other hand, a vacation home is the most ideal plan for an investment, especially in Lebanon. There are a lot of perks to putting your earnings into real estate, and more specifically “vacation homes”, and this is why platforms for home rentals and Airbnb facilities have been growing exponentially during the past decade. First, owning a vacation home saves you a lot of money on the long run, if you actually use it during summer or winter vacations. Your annual mortgage payments could be comparable to the payments you make if you’re renting the house for two months. That way, the investor would be building up equity over time and putting their money in the right place.
Second, owning a vacation home means you can easily put it up for renting when you’re not there, which gives a steady rental income. If you purchase a home in a popular vacation destination, it could turn into a serious money generator. Also, you’d be saving up a lot of expenses, such as hosting costs, supplies, and management fees. According to BankRate, a survey done in 2019 on more than 7,000 vacation homeowners who listed their property on a vacation rental site, showed that almost 40% of these homeowners used rental earnings as a secondary source of income.
Third, it is known worldwide that real estate values tend to go up, especially in famous go-to locations. So even if you simply own a vacation home without putting it up for rent, its value will increase with time, making it a profitable investment.
Lastly, the vacation home that you purchase might become your full-time home. Keeping it until your retirement is a huge money saver for you. And even if you’re still paying for it by the time you retire, the profits made from selling your primary residence will reduce your mortgage balance and make your transition easier.
So mainly, owning a vacation home in the heart of Lebanese mountains and coastal cities gives the investors profits that go beyond economic measures and offers them great peace of mind. So, you’ll have a new nest egg, or a plan for a well-deserved calm retirement!
Tips for Vacation Home
Buyers & Investors
If you’re looking to invest in a Lebanese vacation home, the following part will be a huge help for you. Whatever type of vacation home location is on your mind, there are a few things to think about before you hand over your hard-earned cash or sign on the dotted line for that once-in-alifetime investment opportunity.
First, you should think about the budget that you can afford. Always remember that you’re not only paying for the property, but you are also in charge of taxes, insurance, utilities, and more, so make sure you have a good financial plan.
Second, you should know more about where you want your property to be. Do you want peace and quiet with a few neighbors and a high level of privacy? Or do you want to be close to the bustling downtown, restaurants, and nightlife? The location of your desired home is an extremely important factor to consider, along with its size and architecture. Also, its closeness to important facilities, such as hospitals, grocery stores and others, should be considered.
Third, if you are investing in this home and planning on actually moving there during your holidays, you should definitely consider its closeness to your workplace. You wouldn’t want to live in an extremely distant and hard-to-reach place, making it more difficult for you to get to your important destinations.
However, if you are buying this property to rent it out, there are additional factors to consider. A real estate professional is advisable in this case, in order to guide you through the right decisions. First, renting out your vacation home may have some financial implications, which should be discussed with your mortgage specialist if you’re still paying for it. Second, you should check with the community or town for any restrictions regarding renting. Third, you should be extremely realistic regarding the rental income that you’ll be earning from it. Fourth, make sure you have a good and well-planned exit strategy with your agent. And lastly, do not leave your property unattended for a long period of time; always keep an eye on your home and protect it with maximum care, even if you’re unable to reach it most of the times.
It is simply a blessing to own a vacation home in Lebanon, and its benefits are numerous. As previously mentioned, it all started out as a tradition followed by a lot of Lebanese families, then it spread and became a wellplanned investment strategy for a lot of expats and residents too. The attachment of these expats to the Lebanese lands is what adds value to our property. Their willingness and determination to leave their countries at least twice a year and come spend their long-waited vacations in this charming country goes beyond human understanding, especially during these tough times. The Lebanese real estate market is truly a pearl in the mud, as every other investment strategy has failed miserably.
Lebanese people go against Real Estate International Fundamentals to accomplish their projects and provide the best services for residents and expats. How amazing would it be to own an outstanding home in the middle of the Mediterranean? No matter how hard it gets, Lebanese lands will never vanish, and property will always remain ‘property’; their value will never decrease, it will rather increase with time. So, what are you waiting for? Purchase a charming Lebanese vacation home, and be amongst the top investors, gaining both a financial profit and immeasurable tranquility.
