It’s that time of year when we start to think about our much-needed year-end break. After all, 2020 has been tough for all of us. You might think of getting away from it all and decide to spend a few days at a holiday rental. But the thought of planning everything from booking a property amid a pandemic to checking in and making sure everything is disinfected can discourage you from getting on with the trip. This can be a bit easier if you have a holiday home located just a few hours from your primary house.
So, if buying a holiday home has crossed your mind lately, you are not alone. Many see the appeal of purchasing a holiday home or owning a piece of paradise while dipping into the investment market. Like you, others also think of renting a holiday house at year-end and other holidays.
But before you shop through lands for sale, house and lot packages, and other listings in coastal areas, suburban areas, and other locations that can provide that holiday feel, here are some things to consider:
Location, location, location
Like how you bought your primary home, make the location a priority when looking for a holiday property. The ideal holiday home should be close to everything the area offers, from beaches and fishing spots and hiking routes and lagoons. This ensures your family or your renters have enjoyable vacations. As a bonus, proximity to these adventure and tourist spots can make the property easier to sell in the future.
But you also need to think about convenience. Your house might be on the beachside, but if it’s too far from shopping centers and other amenities, it will be harder for your family and renters to enjoy their stay.
Consider the higher costs
Bear in mind that it can be tougher to get a second property loan than it was to secure funds for your family home. You might have to pay for a higher down payment and get a higher interest rate. But remember that you can offset your mortgage interest payments against your future rental income. Just make sure to run the numbers and hire mortgage brokers to ensure you’re making an informed decision.
Learn how holiday rentals work
Rental income can fluctuate for holiday properties, especially while the world is still experiencing a crisis. Before the coronavirus pandemic, many coastal areas enjoyed strong demand for holiday rentals. But if you buy a property several minutes away from the beach, you should consider having permanent tenants most of the year.
During winter, remember that demand is more consistent for luxury holiday homes in warmer locations. The bottom line is if you understand how holiday rentals work, you can have better expectations on returns and make smarter moves for your family or tenants.
During the holiday break, it’s nice to have a place where you can relax and get away from all the hustle and bustle of city life. This place can also be another source of income for you during the rest of the year. But like any other investments, buying a holiday home requires you to consider a lot of factors—including those that you didn’t have to deal with when you were looking to buy your primary house.
