Purchasing An Investment Property for Holiday Accommodation
When it comes to purchasing a holiday property most people fall into one of two categories
1. Those planning to use and enjoy the property themselves.
2. Those seeking financial gain from their investment.
There may be a mixture of the two, but one need will still be of more importance than the other. This should be a strong influence in your purchase decision. You have several options once you purchase your property –
1. You can let it for permanent rental
2. You can let it for holiday rental
3. You can keep it untenanted and use it only for your use
If you are seeking financial gain from your investment you can choose to either go for a steady but lower yield through permanent tenants or for a higher yield through holiday rentals but take into account that there will be more down time when the property is not tenanted. Obviously, if you have permanent tenants you will not be able to stay in the property yourself whilst it is tenanted. Fisk & Nagle offer a professional property management service and will promote and manage your investment property for you.
If you are planning to use the property yourself you can still let it out as a holiday rental, but be aware you will sacrifice using the property yourself during the peak times of Christmas and Easter. You need to also be aware that if you buy a rights managed property you will only be able to use the property for a set amount of time per year, this varies but usually falls into the 4 – 8 week timeframe during the off peak season.
Generally, the rights managed properties are more affordable and have good holiday facilities, such as pools. You will pay an annual management fee, but you will have an onsite Manager who takes care of promoting and booking your holiday accommodation and maintains the property.
If you decide you want to have more flexibility for your own use of the property or keep it for your exclusive use (including friends and family) you will want to purchase a property that does not have an onsite Manager with the accompanying management rights. When searching for property always look for the tell-tale “rights managed” statement and if it is not obvious ask the Agent if it is rights managed.
When considering the purchase of a property you intend to use as a holiday rental you need to assess the probable income and expenditure. On the expenses side take into account the cost of the management rights (if applicable), body corporate fees, council rates and repairs and maintenance. The location of the property, its presentation and facilities will influence the amount of rent you can expect and good promotion as well as seasonal factors will affect occupation rates. For a thorough analysis of the expected income and expenditure on the property see a qualified Accountant.
The area of the Far South Coast of N.S.W. which includes towns such as Bega, Merimbula and Eden currently has a good stock of affordable investment properties. Call the Fisk & Nagle Sales Team on 1800 For Sale (1800 367 7253) to enquire about suitable properties in the area.