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The
Propertybuyer

Podcast

Hear the latest weekly insights into the property market via podcast by Rich Harvey, CEO and founder of Propertybuyer.

 
Mon 26 Feb '24 with Rich Harvey Sydney’s Inner West – Hotspots and Outlook for 2024
 
 
Mon 12 Feb '24 with Rich Harvey Decoding Sydney’s North Shore Market – Outlook and Opportunities.
 
 
Sat 27 Jan '24 with Rich Harvey Home Buying in the Eastern Suburbs – A personal journey
 
 
Sun 7 Jan '24 with Rich Harvey Economic and Property Market Outlook 2024
 
 
Thu 21 Dec '23 with Rich Harvey Sydney’s Luxury Property Market Insights
 
 
Mon 11 Dec '23 with Rich Harvey Economic Recession or Recovery - What’s next?
 

 

Listen to many more
podcasts on our
Podcasts page.

 
 
 

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Is Buying a Holiday Home a Smart Idea? - December 2023

December 29, 2023 / Written by Rich Harvey

 

By Rich Harvey, CEO & Founder, propertybuyer.com.au

 

Millions of Australians are about to get out of town to celebrate Christmas and the summer break with family and friends in far-flung places around the country.

And if you’re anything like me, you’ll find yourself wandering down the peaceful main street of an utterly charming beach town or country village, stopping in front of a real estate office to peer at the properties on offer in the front window.

“Should we buy a holiday house here?”

It’s something I’ve found myself thinking more than a few times while on a weekend away somewhere nice. I’m guessing you have too.

Ask many people in the world of property and they’ll give you an immediate answer to that question you asked yourself in front of the shop.

No.

But is it as clear-cut as that? Is buying yourself a holiday home a bad idea… or can it make sense in some cases?

 

Don’t put the horse before the cart

Or in this case, don’t put the holiday house before the investment principle. As any savvy property investor will tell you, dealing with a heavy dose of emotion is a surefire way to run into trouble.

And what can be more emotive than imagining yourself and your loved ones enjoying a little slice of heaven in your very own home away from home?

Those who consider a holiday house as an investment first and a recreational tool second have the best chance of long-term success. They’ll keep their eyes firmly on the prize, as they do with all of their other assets.

While a potential purchase will have some fantastic benefits for you and those closest to you now and into the future, your thinking should be much longer-term than that.

For example, a holiday house now could be a big benefit to your retirement – not just your savings, but also the potential to live somewhere idyllic rent-free.

But make the wrong choice and you could wind up in a less-than-ideal position when your working years are behind you.

 

Know where you’re buying

It’s likely you haven’t spent a huge amount of time in the place you’re now considering dropping a pile of your hard-earnt money. Again, a wise investor knows their potential market inside and out before making a move, so you should do the same.

Get to know the area intimately – and outside your new favourite coffee place or the local surf club at happy hour.

Learn what makes it tick both as a holiday destination and year-round. Some areas can be bustling in peak periods but absolute ghost towns off-season, so you should understand how this might affect your decision-making.

There could be immediate implications in terms of rental vacancies and lower rates, as well as longer-term resale price consequences should a potential buyer one day come along who is aware of how high or low demand is throughout a calendar year.

Get to know areas within the area. There are good pockets and ugly parts in every area, so be sure you can spot them. And you’ll get a sense of what makes a particular neighbourhood great, including its proximity to key services, the demographic mix of its residents, traffic, the level of amenity, and more.

Research the fundamentals of the area. Get to know its future growth potential, from population projections to local and regional economic drivers, as well as any planned infrastructure that could see the place really sing.

 

The house matters too

As well as getting to know the area, educate yourself on what types of dwellings might make the best possible investment.

If your plan is to rent the place out to holidaymakers, you’ll want something that’s well-built, has durable fixtures and fittings, and is in a state that makes it low-maintenance to reduce on ongoing costs.

If the place itself is popular among families, that will dictate how big an ideal investment is, how many bathrooms it has, whether there are separate living areas to keep bored kids happy, and proximity to the drawcards that make the town in-demand.

For example, a pokey one-bed unit in a walk-up block that’s falling apart and on the far outskirts of a town beloved by big families who want to be by the beach, is likely a bad bet.

 

Are there alternatives?

Let’s say you want a piece of the holiday home pie but can’t afford the money or the risk to buy a place of your own. That doesn’t have to be the end of the summer-induced daydream.

There are options available to investors to deliver the best of both worlds. Ko Homes is one of them – a one-of-a-kind fractional ownership offering in the Asia Pacific region. Participants get access to a premium property in a desirable location for periods of time throughout the year, in proportion to their investment.

Far from being a timeshare, fractional ownership means you retain the power to decide how and when you sell your respective share. On top of that, it means lower costs, a smaller initial investment, full management that takes the stress out of things, and a familiar place to regularly get away from it all.

 

In summary…

Consider the seasonality of occupancy and watch out that you don’t get too excited by the rental returns quoted over the summer months and forget to calculate the downtime over winter. Think about maintenance costs – particularly if you are buying a coastal property impacted by salt spray.

Investigate the long-term population prospects and historical capital growth performance. Review the demand for the various housing types and look at key data trends in the location- and above all, keep you emotions in check and consider how alternative property investments might stack up against the shiny beach house in the real estate window.

 

Whatever you’re doing…

It’s always worth enlisting the help of a qualified and experienced buyer’s agent who can help you navigate the unique complexities of a holiday home investment.

They can take the grunt work out of researching a location and sourcing a potential property, then take care of all of the negotiations on your behalf. And they can work within parameters that help you achieve your long-term investment goals.

All that’s left for you to do is think about how you’ll enjoy your slice of the good life.

 

  To have one of the friendly Propertybuyer Buyers' Agents  to contact you:

Send us your property brief   or

call us on 1300 655 615 today.

The Propertybuyer
Podcast

 
Mon 26 Feb '24
with Rich Harvey
Sydney’s Inner West – Hotspots and Outlook for 2024
 
 
Mon 12 Feb '24
with Rich Harvey
Decoding Sydney’s North Shore Market – Outlook and Opportunities.
 
 
Sat 27 Jan '24
with Rich Harvey
Home Buying in the Eastern Suburbs – A personal journey
 
 
Sun 7 Jan '24
with Rich Harvey
Economic and Property Market Outlook 2024
 
 
Thu 21 Dec '23
with Rich Harvey
Sydney’s Luxury Property Market Insights
 
 
Mon 11 Dec '23
with Rich Harvey
Economic Recession or Recovery - What’s next?
 

 

Listen to many more
podcasts on our
Podcasts page.