While it’s one thing to rent a beautiful property, it’s quite another to own one, with myriad things to consider. David Untiedt of Perfect Hideaways Invest advises what to bear in mind when buying a holiday home
What is one of the first things to consider when buying a holiday home?
Give serious consideration to how you will use a second home, both initially and over the coming years. If your kids have just left home you may want a smaller property, but, in a few years, chances are there will be partners and grandchildren to accommodate as well.
Is a holiday home as much of an investment as one’s primary home?
A well-chosen property can, over the long term, be an excellent investment. For example, front-row beach houses will always be in limited supply, ensuring healthy capital growth. A sound investment that generates an income through rentals could also provide a welcome supplement to your retirement income. On the back of global economic uncertainty last year, both demand and property prices came under pressure as buyers took a cautious approach. This has created one of the most favourable buyers’ markets in recent history. And while ownership of a second home is not only about the investment potential, the fact that it’s a comparatively safe way of investing your money is certainly a bonus.
What role does location play in this market?
Holiday homes that are a maximum of two hours from major centres tend to do much better in terms of yearly revenue — a two-hour journey is many families’ threshold for a weekend escape.
What should you consider in terms of renting out the property?
Research rental trends in the area, especially if rental payments will be used to help pay off the bond. Most holiday homes generate a big chunk of their yearly income in December and January, as rental rates are significantly higher then and longer, back-to-back bookings are easier to secure. If you plan to be there over this period, it will affect your yearly rental income potential.
What kind of support are you likely to need?
When guests find everything they need, it positively impacts their holiday experience. Consider good-quality bedding, kitchen equipment, and utensils; quality finishes and furnishings; top security; and, of course, a great pool. Make sure you have a short-term rental agreement in place stating the rental period, rate, inclusions and exclusions, confirmation of who will be staying, and any house rules. Charge a damage deposit so you can replace or repair anything that might get broken or misappropriated. If your property is within an estate, add its rules of conduct to your rental agreement.
Known for its incredible portfolio of rental properties, Perfect Hideaways has now created a sales division — Perfect Hideaways Invest. It offers an array of gorgeous properties, each with that elusive x-factor so rarely found in real estate listings.
For more information visit perfecthideawaysforsale.co.za