Property Futures

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At home while abroad

At home while abroad.

At home while abroad

The art of investing in a holiday property.

If you frequently travel to other countries or even to places within your own country, then it is worthwhile purchasing a holiday home as a base of residence during your holidays. Why pay for a hotel or rent a villa (which means paying off someone else’s mortgage) when there’s a vacation home waiting for you elsewhere?

Holiday homes can be villas on a beach or on a golf course, or an apartment in the heart of an exciting, cosmopolitan city. It can even be a house near a holiday resort or friends and family you visit often.

In addition to the exclusivity of owning your own holiday property, not to mention the convenience and the envy of your friends, there is also good reason to invest for the sake of rental returns. In many cases, the management of renting out your holiday property is included in the sale price, or is often on offer as a service.

Although it’s not necessarily as easy as purchasing a home in a desirable location and then just sitting back and waiting for the rental income to roll in, as there must be some consideration for the cost of upkeep and the times of year when there will be no rental income at all, holiday homes often offer built-in features that make using it for your own holidays, or renting out for another’s holidays, easier than expected.

HOW TO START

1. First select an optimal location where you or others are likely to want to visit and spend time in.

2. Choose a destination with a long rental season.

3. Consider infrastructure and make sure your selection is reasonably close to an airport.

4. If you intend to let your holiday home, then be sure to select a property that is attractive enough to stand out on an internet portal.

5. If you are not going to spend much time in the unit yourself, then it is essential to hire a management company, especially when your holiday home is far from your primary residence.

 

Golf property holiday home

GOLF HOLIDAYS

One of the most attractive holiday destinations are golf resorts. They offer very attractive rental returns and represent one of the safest investment opportunities available.

The safety of investing in a golf resort property encompasses more than just security:

  • Many golf resorts that sell properties offer the management of rentals and property upkeep into their services.
  • Golf resorts offer more than just golf, which means that even non-golfers will be happy to holiday on a golf resort. The resorts themselves are usually clever enough to offer ‘Golf Widow’ packages to the spouse of the golf player, which typically include spa packages and tours to local attractions. Even children are covered with children’s playgroups and even golf lessons on offer.
  • With regards to safety, the security provided by golf resort properties is second to none. Often surrounded by security gates or walls, and with security personnel patrolling the area 24/7, golf resorts offer the safest, most secure location to take a family on holiday.
  • Golf holidays are extremely popular in Europe (especially Britain, Spain and Portugal) and the USA (California, Arizona, and Florida) and with new global destinations cropping up, such as in South Africa.
  • Golf is one of the most popular pastimes in the world, with over 25 million players in the USA alone.
  • It’s worth noting that the Chinese, who are already into golf, are increasingly taking notice of the sport and booking more golf holidays around the world than ever before.
  • Golf is very popular with wealthy individuals. In other words, individuals who can afford to play golf can also spend a lot of money on accommodation.
  • Golf is gaining significant popularity in Asia, with many new courses and tournaments popping up in Singapore, Malaysia, Indonesia, the Philippines, Thailand, and even Cambodia and Vietnam. Japan, South Korea, Australia and New Zealand are already popular destinations, as are Europe (Britain, Spain and Portugal) and the USA (California, Arizona and Florida).
  • The number of golf courses worldwide is growing. As of 2008, there are more than 17,000 golf courses in the USA, 2,752 in the UK, 2,442 in Japan, and about 2,300 in Canada and 1,500 in Australia.

According to a World Golf Organisation estimate, as of 2012, the number of golf courses has nearly doubled outside of the USA, especially in Asia. Many, if not most, of these courses – especially newly built ones – specifically include villas and apartments for sale or let, as well as additional amenities beyond the game of golf.

BEACH HOLIDAYSBeach holiday home

Perhaps the most popular holiday home investment destination is any place nearby a beautiful beach. However, it’s important to remember the best rules of investment practice when investing in a beach holiday home where you expect to earn a rental income.

For example, the price point must be stronger than the location alone. Just because you think the beach is beautiful doesn’t mean others will want to spend their holidays there. As always, consider infrastructure: Is it near enough to an airport? Are there shopping and entertainment venues nearby as well?

Beyond the rental income, however, there is an attractive reason to consider holiday homes, especially beach homes. The familiarity of returning to the same place year after year – especially if you have children – can often make up for the cost of the investment itself. There is also the possibility of making friends when you return to the same holiday location, and so you can consider BBQ or dinner parties or other social events with your holiday friends.

If the location is close enough to your primary residence, then there is also the added benefit of spending more time in your holiday home than not. If it is within driving distance, for example, then frequent, long weekends away are not out of the question. Additionally, you can stock your holiday home with stuff you would normally need to purchase while on holiday, such as food, beach gear (surfboards, frisbees, shovels, sun cream), plus clothing, towels, bicycles, and even a car if space allows.

Another benefit of a beach holiday home near your primary residence is increased rental returns and capital gains. If it is in a location where you want to spend your holidays, then it’s likely your neighbours will feel the same way.

However, there are some additional factors to consider when purchasing a beach property:

The cost of upkeep may be higher due to salty air. Depending on the materials used in constructing the property, the damage caused by salty air and humidity may need to be addressed yearly.

Additionally, if you are going to rent out the property, then your visitors may take an extra toll on the property by leaving their wet beach towels and equipment around and by dragging sand into the place.

Melbourne city holiday home

CITY HOLIDAYS

If you’re a person who likes the hustle and bustle of city life, then do not forget about the possibility of purchasing a home or apartment in a major, cosmopolitan city. As investments go, this one is often a fairly safe bet as it appeals not only to holiday-makers but to business travellers as well.

In the Asia–Pacific region, some cities where the property investment market is known to be vibrant include, in no particular order, Singapore, Bangkok, Sydney, Melbourne, Brisbane, Auckland, Kuala Lumpur, Jakarta and Manila.

While Singapore and Australia are well-developed countries with cities that have been attracting foreign investment for years, there are other new places to consider in the emerging markets, such as Malaysia and Indonesia.

Regardless of which city appeals to you the most, there is no doubt that with the infrastructure already clearly in place, there is less to fear with the investment of a holiday property in an already well-established city. Airports, restaurants, museums and entertainment are at hand, encompassing much of what holiday-makers expect to do during their stay. There is also the added benefit that excursions to nearby local attractions – even beaches and golf courses – will be available from an inner-city location.

As far as tourists are concerned – and therefore your rental potential – when choosing their holiday destination to a country where they have never been, there is a certain amount of security in choosing a major city. Regardless of where they stay in that city, there will be something to do and fun to be had; if choosing a holiday resort, on the other hand, and the resort falls short of their expectations, they may very well be stuck.

And, as mentioned, there is the rental appeal beyond just holiday-makers. Business travellers who frequent the same city are increasingly looking for alternative accommodation packages beyond hotels.

Business travellers, not unlike holiday-makers, are specifically looking for the ability to make themselves more ‘at home’.

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This entry was posted on December 21, 2012 by in Future, Investment, Property and tagged , , , , .

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