So, you’ve fallen in love with the beachside cottage you rented with the family over the holidays. So much so, you’ve decided you want to try to buy your own. Now what?
Where do you start?
Most people decide to use a holiday home for themselves for perhaps one or two months each year, then rent it out at other times to help with costs. So, there are quite a number of issues to think through.
You come back from a holiday in the mountains, or by the beach somewhere, tied up in knots because you want a holiday house or apartment or shack just like the one you've spent a happy few weeks in. What often follows is hours spent on the Internet, looking at what is on offer and doing the sums.
If an unintended consequence of a peaceful get-away-from-it-all summer holiday is that you’re now planning to buy your own holiday home, there are steps you need to think through. Of course the obvious is finance.
It is easy to forget that enjoying a holiday home can be very different from the reality of owning and maintaining one, despite the rise of popular short-term letting websites such as AirBNB. The whole point of staying in a beachside cottage is to be free of normal routine and responsibility. Unfortunately, making sure that a cottage is a suitable investment or that it will deliver on your expectations is a different matter. A property that is very low maintenance and highly viable as a solid rental in all seasons is the best bet.
If you plan to go ahead, here are some of the key issues to consider.
Location, location, location
Think carefully about what you particularly enjoyed about holiday homes you have stayed in over the years. Was it that you could walk to the fish and chip shop and the local pub? Or was the appeal in the home’s total seclusion and uninterrupted views?
There’s no point buying just any property in a town where you enjoyed your holiday, and expecting the experience will automatically be replicated. What appealed to you about the location is what will appeal to people you will want to rent your holiday home to. Ideally, a holiday home should be relaxing and safe, and the location should be popular but not too busy.
Kid-friendly or romantic hideaway?
A property in or near a community that caters well to families is likely to be a better rental over the long term. This means there are two or more bedrooms, not a lot of breakable knickknacks in the house, there is a beach that is regarded as safe for swimming, plenty of board games and video games are available, and there is easy access to shops for food and a reasonable Internet connection.
A rental that is affordable for families and is in a good location is likely to deliver better returns overall. If that doesn’t appeal to you, understand that the market for secluded, romantic getaways can be more limited and will require more intensive and targeted marketing.
An expensively renovated holiday home might be tempting, assuming you can afford it, but bear in mind it will get wear and tear from renters and also from sitting empty for long stretches.
“The best buy would be something that is very comfortable and liveable and that you can perhaps upgrade at a later stage when you may choose to spend more time in it,” Mr Bunn advises.
“Ideally you want something that can take a few knocks and that doesn’t need constant looking after.”
Maximising rental returns and maintaining and growing the value of the property should be a priority, regardless of all the emotional excitement of owning a holiday home, First National Real Estate recommends.
“If you plan to rent it out during certain periods of the year, there can be a huge number of headaches involved in managing the bookings, handing over keys, ensuring the property is handed back in good condition and complying with various legal regulations and requirements,” Mr Bunn adds.
“Professional property management would be strongly recommended for any holiday rental property. And if it sits empty for long stretches, general maintenance and security should be arranged.”
A good rental will attract repeat business. Location and competitive rents are key to this but so are special touches which help your property stand out. These can include preparing an information booklet on local restaurants and tourist attractions for guests and having a selection of tourist brochures, providing high-speed and wireless Internet connections so guests can manage any work commitments – and possibly stay on longer as a result – quality bed linen, and possibly a discount voucher for a local meal.
“Little touches can go a long way to creating a positive impression with renters and attract repeat business. You can discuss opportunities with your property manager.”
Do you own a holiday home? Tell us about your experience in the comments section below. Was it a financial success? Did you use it as much as you thought you would? Did you rent it out when you weren’t using it and how did that work out?