EVERYONE wants to make the holiday feeling last as long as possible which makes buying a holiday home suddenly seem like a good idea.
And it can be – just follow the experts tips and buy with your head and not your heart according to Real Estate Buyers Agents Association president Jacque Parker.
Ms Parker warns would be holiday home owners not to fall for the ‘romance” of a holiday home and use your head to make the best investment decision.
‘People generally buy holiday homes with the intent on returning for regular holidays but should also consider the investment merits of such a purchase,” she said.
It was important to investigate rental yields, the cost of maintenance and things such as management fees and cleaning not just how far it is to walk to the beach.
Here are her tips for buying a holiday home.
1. Never buy a holiday home at the peak of the market.
‘When the property market is flat a quality property in a good location will always find a buyer,” she said.
Ms Parker said a good question to ask yourself was: Would this property generate a lot of interest in a buyers’ market?
‘If the answer is no, be very careful what you pay for it.”
2. Have a buffer of funds to cover unforeseen expenses
Ms Parker said even partially leasing to other holiday-makers could incur unforeseen costs.
‘Consider having an emergency buffer for common items that may break down more quickly or
require replacement due to increased wear and tear.”
3. Consider ALL realistic costs
Ms Parker said many holiday home buyers forgot that a second home incurred a second lot of
expenses: electricity, water and council rates, maintenance, cleaning, annual pest
inspections, land tax and insurance.
4. Is it cheaper to holiday-lease yourself?
‘Consider the long-term benefits of holidaying in the same place on a long- term basis. Is this really what you want? Financially, would you be better of holiday leasing rather than carrying the costs (and potential stress) of a holiday investment?”