Holiday Home or Just Hard Work?

Published : 3 June 2015

With interest rates at a record low and some very well priced properties on the market, many people may be considering adding to their real estate portfolio with a holiday home. Who doesn't dream of a beachside cottage or hinterland hideaway, an escape from the hustle and bustle of everyday life?

Making the right choice

Here are a few pointers to get you on your way.

According to Real Estate Buyers Agents Association president Jacque Parker, the most important rule is to buy with your head, not your heart. It's all too easy to fall in love with the romance of the idea and ignore the practicalities or, in some instances, glaring faults!

For example, don't just think of it as purely your holiday home. It's also a long-term investment.

 

Don't overspend

When property prices are low and almost every residence attracts heaps of interest because of that, it's easy to get wrapped up in the bustle of it all and make a mistake. Just ask yourself this: Would you still want it if it top price? If the answer is no, DON'T buy it.

 

Buy or lease

Will you be happy to always spend your holidays here - and therefore carry the expense of OWNING the property? If the answer is no, then perhaps consider holiday-leasing.

 

Buffer zone

When buying any sort of property you just know there are going to be additional expenses, or urgent work to carry out, so make sure that when you set your top price, you hold some cash back as a buffer.

 

Home from home

The great thing about owning a holiday home is that you can make it your own, furnish it to your liking and leave behind certain personal items. But remember, when you're NOT using it, you could be making a nice income from letting it out. So think carefully about how you furnish it and what you leave behind.

 

Money maker

Holiday homes in the right area can attract very good rent and make a big dent in your mortgage. It also means you can offset certain costs and losses. But remember, you lose the freedom to just turn up and use it yourself.

 

Plan ahead

Rather than thinking of this property as merely a holiday home, remember it might be the property you eventually downsize or retire to, so choose carefully. What may appear perfect for a weekend may not suit when you are there 24/7.

 

Hot spot

According to Stayz the most popular place to buy a holiday home is currently the Sunshine Coast in Queensland.