As the cool of winter sets in, thoughts of the beach may be far from your mind. However, winter is often a great time to look at buying a beach house or holiday home. There’s a lot to think about when purchasing a holiday home. Where should I buy? What should I buy? How do I buy?
Generally, there are two camps when it comes to holiday homes:
- Those planning to use and enjoy the property themselves, and
- Those seeking financial gain from their investment.
Sometimes it’s a mixture of the two, but one factor will probably carry that little bit more importance for you. Before you start, you need to know what your motivation is in purchasing the property, as that will inform the decisions you make from the outset. The research and preparation you need to undertake will vary, depending on your end goal.
If you are purchasing an investment property, your search should focus less on personal preferences and more on features that will maximise the return for your investment. If you’re buying for you and your family, you will need to look at how this house or apartment might suit your needs!
Either way, below we have highlighted some key specifics you need to think about when it comes to owning your own little slice of paradise!
Can I afford it?
Setting a budget, getting your credit in check and securing pre-approval of your loan will save you the grief of looking at houses you can’t afford, and put you in a better position to make a serious offer when you do find the right place. That is where your mortgage broker comes in, chat to us today about how much you can borrow and how we can help you.
Where should I buy?
Answering this question is absolutely key, and will very much be influenced by whether you are looking for you, or looking for a weekender to rent out! As we said, know your goals from the outset.
Looking at holiday home locations there will always be the “firm favourites”, those places we are all familiar with and are already a popular place to visit, and the “emerging destinations”, normally lesser known, where the purchase prices may be cheaper but you may face less demand, at least initially, for your rental.
Once you know where you might like to buy, find out more about the area. Research any future developments planned in your preferred area, then think about accessibility and season duration.
Internet forums are a great way to get an insider’s view into buying in an area. Drive around the neighbourhood at different times of the day and night and see how you feel.
But, how do I rent it out?
There are three main ways you can rent out your holiday home – owner managed, property manager, or a combination of the two.
Some owners do all the marketing online, on websites such as www.stayz.com.auor www.takeabreak.com.au, or take bookings over the phone, whilst letting the property manager take care of things on the ground.
Owner managed gives you the opportunity to screen potential travellers and decide who would be a suitable guest in your rental. But, someone needs to be there to manage arrivals and departures, cleaning and maintenance.
The most important thing is finding the method that will work best for you.
Pitfalls and traps for new players
Turning a property into a holiday rental can be tough, but it can be very worthwhile! There is a lot to think about, from legal preparation, applicable tax deductions, what you need to know about taking payments, maintenance planning and housekeeping. We are here to help support you with your financial goals, so if a holiday home or rental is something you are considering, please get in touch with us.