Anyone lucky enough to own a second home overseas is well aware of the advantages: years of holidays and potential rental income are the most obvious ones, but growing numbers of owners are starting to realise that their second homes can also be used as passports to the world. How do they do it? Through home exchange.
Popularised by the 2006 film The Holiday (starring Cameron Diaz and Kate Winslet), home exchange has been growing in popularity, and the potential for second-home owners is enormous. As an experienced home exchanger, I've swapped my south London home more than ten times with exchangers from as far afield as New York, Dubai and Tobago, with great success. No more squashing the family into hotel rooms and, even better, no costly hotel bills.
For me, this far outweighs any downsides, but, admittedly, as each swap entails industrious cleaning and tidying beforehand, and as I clear spaces in the kitchen, bathroom and wardrobes for incomers' belongings, I often envy second home owners for whom the process is much more straightforward. Second homes are geared up to incoming guests, and holiday rentals are generally devoid of personal belongings. Another downside of exchanging your principal home is co-ordinating simultaneous travel plans with an exchange partner, while holiday home owners can be more flexible. Avoiding peak rental times is sensible, but, if your holiday home stands empty for any length of time throughout the year, it makes sense to list it for home exchange and, by swapping with other second home owners, you can “bank” holidays around the world for years to come.
In the US, the exchange system has traditionally appealed to timeshare owners who often buy “time” in properties or resorts, sometimes without ever visiting, but instead use them as “currency” to trade for holidays in other destinations. Companies include Interval International and RCI, which claims to be the world's largest timeshare exchange organisation with 6,734 resorts listed across the world. In 2003, Suzie Magnus set up International Vacation Home Exchange in the UK to cater for the booming second homes market: “It adds far more flexibility, as exchanging your principal home isn't for everyone,” she says.
IVHE exchangers earn credits, which they then spend to stay in holiday homes across the globe. “If you own a typical British country cottage, chances are a large Caribbean villa owner won't want to swap. This way, you can build up credits and then choose. We make all arrangements, which makes the process very easy,” she adds. Some second home owners (like our case studies) prefer to list their second homes on traditional home exchange sites. The website www.homeforexchange.com has more than 15,000 listings spanning 120 countries, and includes 3,000 second homes. Site owner Ans Lammers says: “Second home owners are much more flexible, so they have a larger chance of finding suitable partners to exchange with. The recession has made home exchange more popular and we see an increase in exchanges for short distances and weekend exchanges.”
If the credit crunch is impacting upon your rental income or holidays, maximising your second home's potential is vital and, unlike rental income, exchanges are not liable for tax. Most sites offer insurance, security and contract advice, although insurers typically welcome your property being occupied. Boredom with visiting your second home becomes a thing of the past as a search through home exchange listing sites reveals owners in all corners of the globe keen to exchange.
Debbie Wosskow runs the luxury site www.lovehomeswap.com, which has 3,500 listings of which 34 per cent are second homes. She says that the booming second homes market has fuelled interest in exchange: “Canny investors want to realise the value of their homes, and use them to finance their lifestyle and travel – they like being able to swap beach for ski. Many second home owners like the added security that swapping their second home with other second home owners brings. It's totally different to the rentals market.”
Case study: French farmhouse
Working as an advertising headhunter, Gay Haines is a recent convert, but, since discovering www.lovehomeswap.com, admits to being “totally addicted”. She says:
“I'm on there all the time, and get carried away imagining myself on the catamaran in the private marina. It's really in the realms of fantasy, but, then again, what have I got to lose?” Gay lives mainly in London, but has listed her French farmhouse and a Ramsgate penthouse, both of which are holiday homes. It is the French house which appeals to exchangers, “It's already had about 800 hits,” she says. Despite “having exchange in the back of my mind for some time”, it took Gay a while to register her properties. She admits to finding uploading photos and writing descriptions tedious, yet found the process instantaneous, as both properties were already listed on holiday rental sites.
“I registered, then was amazed to find that www.lovehomeswap.com had already downloaded photos from the holiday rental site. It was incredibly easy for me, as I hate all that stuff.”
Gay has already exchanged with a property in Ireland, with further exchanges planned to Canada, Corfu and Mallorca. “I've got so many holidays lined up that I think they might greatly outstrip my lifetime,” she says. She is unconcerned about missing out on rental income from her French property: “We only let it for a few weeks to cover running costs. The rest of the time, we or our children use it, so exchanging makes sense.”
Does she see any difference between renters and exchange partners? “When someone is paying, the property has to be immaculate and you can't leave anything personal behind. There is slightly less responsibility with an exchange, but, then again, they have paid-for air fares and expect to have a good holiday.”
Case study: Spanish house and Italian townhouse
Musician Jane Carhart has been an avid home exchanger for more than thirty five years, and has “never had a bad experience”. Living between a whitewashed rural house in a “pueblo blanco” in Andalucia, Spain and a renovated 200-yearold town house in the village of Carassai in Le Marche, Italy, does, she says, give her the perfect set up for home exchange: “I live in two houses, so arranging home exchanges is even easier than when they have to be simultaneous.”
Originally from New York, Jane has swapped her homes through www.homeforexchange.com many times to visit relatives and attend concerts. Her Italian house has been swapped for Cape Cod, Budapest, Mexico, Paris and Brittany. Her Spanish house has been exchanged for Millbrook, the Hudson Valley in upstate New York and Brooklyn.
In peak summer months she rents her properties for income: “I like to see how other people live. Trust is necessary but 99% of the time I've no qualms. I prefer visiting cities and travel so much more -up to six times a year- thanks to home swap.”
Tips for trading places
- Research your market. Have a good look at house swap sites' listings to ensure that the places you'd like to visit are well represented.
- Show your property in its best light. Treat your listing as an estate agent's details. Take good photographs and be as detailed as possible about your property, destination and yourself.
- Communicate. Communication is key to any successful home swap, and it's much easier today thanks to email and Skype. Before going ahead, discuss aspects such as phone use and cleaning. Some sites have contracts to minimise misunderstandings.
- Trust your instincts. If at any point you feel uncomfortable with an exchange partner then don't go ahead.
- Think about your valuables. It's easier if you're swapping a second home – with few personal contents – but some exchange partners opt to use one room or cupboard to lock away valuables.
- Arrange insurance. Tell your house insurers. Most prefer properties to be occupied rather than empty, and any car exchange also requires insurance.
- Leave a guide to your home and area. Detailed information on your property and area is vital.
- Be flexible and proactive. Flexibility is crucial, and most successful exchangers are proactive and don't wait to be contacted.
Useful sites
www.intervalinternational.com
www.rci.com
www.ivhe.com
www.holswap.com
www.lovehomeswap.com
www.homeforexchange.com