Hi Guys
We are looking into the possibility of buying a unit 1 street away from a prominant NSW beach. As the deal would mean a high entrance price we were thinking that it may be possible to offset some cashflow by holiday letting as opposed to normal tenants. The 2 bedder would cost 500k and normal tenants would only bring in 360 a week.
I realise there are costs (advertising, cleaning etc) and am not sure about insurance for this type of thing. Also think that we are tapping into a market where there isn't much good quality hotels in the area and therefore our brand new unit might be appealing to daytrippers, holiday makers etc
Anybody got any experience with the above and do you recommend or not the above approach ?
Hi there
we have just been through the process of changing a short term rental to a permanent rental. The reasons being the building management changed and they were trying to minimize our use of the property to the extent it wasn't worthwhile doing any more.Having a permanent rental is better from a cashflow point of view as the holiday letting – whilst lucrative – you end up paying a greater proportion for the ongoing expenses – we were ending up paying 20% in every dollar toward expenses – and there was still an exit clean and linen of approximately $300 per month to pay. There were some months where there was very little income – which becomes a problem with the bigger bills coming in regularly.
You will obviously have to do the due diligence to see whether having the property close to the beach will be good from a capital growth perspective as it doesn't seem attractive from a cashflow perspective
thanks
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