Holidays often spark the idea that buying a holiday home is a great way to get a free getaway but you need to be careful not to buy into the false belief that a holiday home will save money.
Whenever you are using your holiday home, you aren’t collecting rent, so that lost rental income is the same as directly paying for a getaway. If you really want to save money, focus on buying properties that are great investments and then pay for your holidays separately.
If you’re feeling financially secure and really do want to splurge on a holiday home, consider its investment potential so that if the tide turns you could still make money from the property.
This type of property investing can be more risky; homes may sit empty for weeks while you still have to make those mortgage payments, maintenance costs can be steep, particularly if properties are near the ocean, and finding good property managers in far away, smaller locations can be tough.
Whatever you buy should be an attractive rental and have attributes that will make it easy to sell, so selecting the right getaway spot is crucial.
The best areas for snapping up a holiday home don’t rely on tourism alone to drive rental demand as some vacation spots can fall out of favour – stable towns with a sizeable resident population and factors to draw both residents and tourists are ideal.
Great beaches aren’t enough; look for unique major facilities or attractions, significant shops and amenities, one or two good solid industries to create jobs and support the rental market when it’s not tourist season, as well as good transport facilities into the area.
After all of your research, which should include looking at projections for the area, you may do better by buying a great investment property that ticks all the right boxes and then simply paying for a well-earned holiday.
If you have an interest in building your wealth through property, then call us on (08) 9381-7450, or request a FREE Starter Pack.
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