Oh for my own holiday home!

How many Australians/New Zealanders have come back to work in January with sand between their toes and dreams of owning their own holiday home? Or perhaps it was the green grass underfoot, the bush walks, the hills to climb, the river adventures… whatever beckons.

The holiday home-come investment property is one real estate option that should firmly be viewed with ‘head over heart’.

If owning a home-away-from-home is on your wish list for 2018, you are not alone.

Depending on its location and the level of accommodation, a property that you can rent out when you are not using it may be an investment that can deliver a sound return.

Investing in a property at your favourite holiday destination may seem like an attractive option but for the investment to perform well, it needs to be purchased astutely and managed correctly.

Are you willing to sacrifice your own access during peak periods for rental return?

Will it be easy to find tenants outside of popular holiday times?

What would be its return if it was tenanted permanently?

Are you aware that expenses related to holiday letting are often higher than permanent tenancy? Maintenance costs, including cleaning after each tenant vacates the property, are likely to be greater due to the high turnover of tenant occupancy

The property investor must calculate all realistic costs. Holiday home buyers can forget that a second home incurs a second lot of expenses, including electricity, water and council rates, maintenance, and, especially when it’s to be rented, insurances.

Holiday home buyers should spend time in the area both in and outside peak holiday periods in order to get a feel for the neighbourhood, town and region, including the locals and holiday makers, before making the financial decision to buy.

Research the market well, including the property’s potential for both rental return and capital gain.

And sad but true, there is the potential to become bored with going to the same place every holiday, and wanting to retire there down the track may not be so attractive once that time arrives.