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Holiday homes have traditionally gotten a bad rap when it comes to investment potential, but they can be lucrative provided the timing, location, marketing and management is right. Here is our guide of what to consider if you want to ensure your holiday home has earning potential.
Earning vs. enjoying
One of the main challenges to using a holiday home as an investment is peak periods; i.e. the time that you and your family want to use the property, will also be the time you can make the most money from it. This means, you have to be clear on what you want to achieve from the property before you buy it.
Peter Hanscomb, CEO of Belle Property says, if you want to use your holiday home for regular getaways, during school holidays and other national breaks, you have to adjust your expectations for its rental yield.
“Upfront you need to decide if you will forgo staying in the peak seasons for the increase in rental income, or if you prefer the flexibility of being able to stay in the property whenever you like. That will help to manage your own expectations for income potential,” he says.
Location, location, location
Your best chance for making long term income from a holiday home is ensuring it’s located in an attractive lifestyle area. That’s because, according to realestate.com.au, just like with regular residential properties, the best money you’ll make on a holiday home will often be from capital growth.
“Location is key because it ensures supply and demand for property. If your holiday home is located in a lifestyle location where people want to visit and live, it means you can rely on maximum occupancy.
“For example, a good location is along some of Australia’s pristine coastline – North, Central and South, where you have strong peak periods to take advantage of during summer, but also good facilities and infrastructure like cafés, restaurants and things to do which will attract visitors and therefore occupancy all year round,” says Peter.
Marketing and management
You can’t earn an income from a holiday home unless it is rented – and it can’t be rented unless people know about it. In fact, according to localagentfinder.com.au, marketing your property is the most important factor in attracting tenants.
While these days there are a plethora of options for advertising a holiday home and managing tenants, many of these online platforms require you to do most of the work.
“The alternative to an online, DIY platform is leaning on the property experts who can ensure you get the best value out of your investment,” says Peter.
“Belle Property Escapes is the holiday rental arm of the Belle Property national real estate network and it provides superior marketing, management and advice in terms of managing and maximising occupancy of your holiday home.
“We have been selling, managing and advising on property for more than 20 years so it pays to have an expert backing you.”
To learn more or to list your holiday home, visit Belle Property Escapes at belleescapes.com.au