What to Consider When Investing in a Holiday Home
The festive season is approaching, so are your holiday plans. But have you ever thought about investing in a holiday home?
For many, the idea of having an idyllic coastal or leisure setting that can be enjoyed on a whim is appealing. But, as with any property purchase, a good investment decision requires research.
There are mixed opinions on the viability of investing in the holiday home. Finding the right homes in the right areas can secure a solid nest egg for retirement.
Here are a few factors to consider when investing in a holiday town:
Where Is It? When investing in a holiday home, location is key. Other factors to consider are how well maintained the area and its facilities are, as well as the general market conditions prevailing in the suburb.
Can You Afford It? Holiday homes are aspirational, but it could also be a source of stress and financial strain. You will need to consider your financial position, paying special attention to the acquisition costs such as a deposit, transfer fees, and conveyancing fees.
Remember at PropertyFox, you pay only 1.5% commission (or min R35,000) of the sale price (Excl. VAT) and we do all the work, all you need to do is open the door.
Who Will Manage the Property? You’re unlikely to occupy your holiday home through the year. You might also opt for a holiday home far away. There are a few practicality issues with managing a home in another town, so it might be worthwhile hiring a professional property manager to keep things tidy. They will conduct regular inspections and screen, select and place tenants if required.
There are a few practicality issues with managing a home in another town, so it might be worthwhile hiring a professional property manager to keep things tidy.
How to Make Money from Owning Holiday Property
Many investors rent out their holiday property to earn money while it’s standing empty. Renting out holiday accommodation in sought-after areas during peak season is generally very lucrative. However, many investors struggle to rent out their properties at less popular times of the year when holidaymakers are thinner on the ground.
Here are a few tips for you to look at when vacation tenants seem scarce.
Promote Your Property Effectively
Identify who your holiday home will appeal to and direct your marketing efforts accordingly. If, for example, most of your bookings come from far away, target potential holidaymakers through localised advertising. That can be online or in local newspapers. Remember, data is everything – so make sure you track these things.
Most importantly, make sure the photographs advertising the property portray it in the best possible light. Consider hiring a professional photographer if necessary.
Kit the Home Out with Comfort in Mind
Seaside homes generally attract young families. Make sure your unit caters to their needs with things like high chairs and safety gates. Go the extra mile and offer things like board games or sporting equipment. Don’t put anything in your holiday rental that you won’t use yourself. A good TV, access to luxuries like pay-TV, good Wi-Fi and high-quality linen make all the difference.
Manage the property
There are many benefits to using an agent to advertise and manage your holiday home bookings. As always, use a reputable, registered agent. Keep a close eye on things and start asking questions if the electricity and water usage seems higher than usual, even if the agent is adamant that no one has stayed in the unit.
Make sure that you do not lose sight of why you bought the home and try to make use of it yourself at least once a year. Make sure that the investment you are making is worth the financial commitment.