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Buying your own holiday home

Buying your own holiday home

With international borders still closed, the lure of Australian holiday destinations is stronger than ever. No wonder, then, that more of us than ever are buying a holiday home.

Buying a holiday home has a number of attractions. You’ll always be assured of a comfortable place to stay in your favourite destination. No more worrying about leaving it spotless for the next guest, and you can definitely bring the dog!

But how do you choose the perfect home for you?

Get clear on your goals

First, let’s look at why you’re buying a holiday home in the first place.

Most people who buy a holiday home want the best of both worlds. Somewhere you can go on holiday with your friends and family, but which will also provide you with an income stream.

It is possible to buy a holiday home that will be a solid investment. However, be aware that to maximise your income, you’ll need to rent it out as much as possible during peak season (summer, school holidays and long weekends). This restricts how much you can use it yourself.

However, cash flow isn’t the only way to make a return on your investment. You can look at a holiday home another way. You’ll be saving money on your own holiday accommodation while benefiting from capital growth. And even if you only rent it out when you’re not using it, that helps pay down the mortgage.

A holiday home that you plan to use should appeal to you and your family. If you want to rent it out in between those times, though, it should also have broader appeal. Here are three things to look for.

1. A desirable location

This might seem obvious, but location isn’t just about a good view or proximity to the beach. You and your guests will want entertainment and convenience as well.

Look for somewhere with nice restaurants or cafes nearby, well stocked local shops and other amenities. A stunning view or tourist attractions are also indicators that you’ll have your pick of paying guests.

2. A thriving local economy

Is the home located in an area with more than one industry? Some of the most beautiful holiday destinations are unfortunately very vulnerable to economic change. If the town is completely dependent on one industry, which then suffers a downturn, the fallout affects everyone. Including your rental income and capital growth.

Instead, look for somewhere with a few irons in the fire. Many holiday areas are heavily weighted towards tourism, of course, but solid infrastructure and local industry are a good sign that it will weather the next storm.

3. Stable weather conditions

Talking of storms, is your new holiday home in a disaster-prone area? Many coastal towns are at risk of flash flooding and storm damage, for example. The 2019-2020 summer was also a stark reminder of the bushfire risk faced by country regions.

You may not be able to guarantee that your holiday destination will never be affected. Knowledge is power, though. By checking what extreme weather events have happened in the area, you can take steps to ensure that the home is suitably built to reduce risk. And of course, don’t forget insurance.

4. Easy accessibility

Holidays are all about getting away from it all. But make sure you can actually get away! One good rule of thumb is to look for locations that are no more than two hours drive from a major centre or airport. That’s close enough for people to complete the trip in one day if they’re renting a car, but still away from the hustle and bustle.

If you’re going more remote, pay careful attention to the route.

For example, that remote shack in North-West Tasmania might be romantic in the middle of summer. But in winter, will the roads become impassable?

Island destinations are as inviting as it gets. But do you want to pay the aeroplane or ferry fare every time you visit?

When you’re looking to buy, pay some thought to the accessibility of the home. Are the roads good? If it’s only accessible by air or sea, are there reliable services all year round, or just in summer?

A destination with good infrastructure is more likely to attract paying guests. You can also check the local government website to see if there is any infrastructure planned for the region. Buying somewhere just before a light rail project or new freeway goes in, for example, might reap rich rewards.

5. Low maintenance finishes and gardens

Holiday homes are often unoccupied for several weeks at a time, especially in the off season. This means that they need to be low maintenance. That lush lawn and delicate orchid collection won’t be looking as good after a month without water, after all.

To make it easy to keep your property nice in between guests, and come back to a pleasant environment when it’s your turn, look for the following:

•  A low-water garden and hardy plants like succulents or natives.

•  Windows and roofs should be in perfect condition and completely water tight.

•  Tiled or wooden floors are less vulnerable to stains and damp than carpet.

•  Laminate or stone bench tops in preference to timber or marble, which can stain.

Of course, you’ll need to do your due diligence before buying. So go ahead and book that next holiday — strictly for research purposes, of course!

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