Hi all, just looking for peoples thoughts!
Does anyone have any experience (good and bad) with holiday rentals? I am currently looking at some properties in coastal NSW that are cash flow positive and seem to have been for a number of years now. So why does there seem to be so many on the market?
I have looked at all fees including body corp, management, repairs, maintenance etc etc.
Ideas?
Mick
Mick
Each to their own but i would avoid them like the plague.
What looks like a nice place to buy or invest in when you are sunnying it on the beach can look at bit different when the level of occupancy / weekly rent falls out of holiday season.
Other potential is financing the deal as lenders wont take in the norm holiday income into consideration and this could affect your serviceability.
Old old story buy with you head and not your heart.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
So many on the market.
Finance difficulties (as per Richard's email above) mean the number of buyers can be reduced.
You may also find that when things get financially tough then the holiday house on the beach is often one of the first things to go. Given sentiment around the country generally seems to be wallowing in its own sorrows at the moment – this could be one reason there are a number of units for sale at the moment.
Some people buy holiday units on the romantic notion of wanting an annual holiday in their dream location each and every year. Trouble is their preferred holiday time often also coincides with peak season and a great percentage of their projected annual income can be lost while they holiday.
Some people also buy holiday accommodation so they can have a holiday house on the beach and get great tax benefits too. Unfortunately it isn't quite that simple and complications can occur. If tax saving was one of the reasons you were considering holiday accommodation then make sure you speak to an accountant, at length, about what you can and cannot do.
Thanks Derek and Richard for your advice!
I heeded your advice and am thankfull that I did.
Mick
Maybe wait to buy the holiday rental ay your dream location when you have money to burn.
Not now!
Or if you do buy, ensure that you have control ie not a managing agent assigned to a complex or a hotel group etc as there are too many other factors to consider.
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