May 19, 2014
While the idea of owning a holiday home is very appealing, thanks to high property prices, it can be a very expensive luxury but there are ways to combat this problem and reduce the costs associated with owning a holiday home is to rent it out to holiday makers.
Renting out your property throughout key times of the year may allow you to not only buy your own little slice of heaven, but earn some good income at the same time.
According to Data from Finder.com.au, some holiday homes are commanding rents as high as $3,000 a night but, before you get too excited and dive into a holiday home investment purchase, it pays to do your research on the matter.
It’s in the destination
Research the best performing holiday homes in Australia, find out where they are located and what makes them so successful.
Ask yourself: are they situated less than two hours from the closest major CBD? Is the accommodation modern and well decorated? Is the property close to water, shopping centres or local transport?
Once you have identified what features a successful holiday home has to have, you can start to consider the fun aspects of buying a holiday home – like how often are you going to stay there?
Of course, if you are looking to make a good income out of your property investment, you should understand that the amount of time that the property is open for bookings will affect overall rental income.
Other things you need to consider are If the property is vacant for more than 6 months of the year, it may be considered as an owner-occupied property, which can stop you from claiming certain tax incentives.
Further, the rent you charge for the property will also affect the amount of income you earn from the investment, so make sure you do your research and see what other properties in the area are being rented out for.
Speak to your adviser
A financial adviser can help you manage your finances so that you can afford to buy your own little slice of heaven. Further, as a mortgage broker, I can help to ensure you are put into the right loan product for your needs both now and into the future.