Are any of you out there buying in holiday/tourist locations and renting out your property on a nightly/weekly basis?
I’m interested in the pros and cons of doing this and the experiences – both good and bad – that you have had.
I realise it’s more labour intensive, but expect this can be mitigated with hired help.
I also realise that properties have to be fully furnished and this makes for more up-front cost. But do the extra dollars charged make for more overall profit – taking into account vacancies, cost of set-up, hired help, and time involved?
Your replies would be appreciated – especially from those actually doing this rather than those with a general opinion.
Julian2Julian
Ive waited to see some experienced comment myself so you may have to settle for my limited knowledge.
I have a couple of blocks of land in the “new Noosa” Agnes Water/1770 which is above Bundaberg Qld. Land is good but pays no bills, “luckily” thay have appreciated considerably allowing us to build a Hoiliday rental house.
You are correct with every thing you have said, more costs, more work, then why do we do it? Cause we make more money.
In our case if we had just built, and rented out we would have got approx $200-$230 a week for permanant. But as a holiday rental it varies from $650 to $1000 a week. So it only has to rent half to quarter of the time for the same income. although there are extra costs involed they are generally proportional to your occupancy, i.e. agents fees are per rental, power,water and wear and tear more, the more its rented.don’t forget linen, a local laundry service can pick up and drop off hire ‘sets’ i.e. a double set will have sheets towels, face washers,teatowels..There will much difference in income depending on location and property style. If you have commanding ocean views you will be first to rent, or if further back the last, this needs to be realisticlly looked at and your booking agents will have opinions, which should be listened too.
Keeping the place rented is obviously the key.. so you may have to be creative in how this is done, You may need to make your property stand out from the crowd, by its finnish,or comfort level. bright colours inside etc. Offer packages like meal discounts with local restaraunts, you bring buisness to them and they give discounts to your guests.
Offer the booking agents incentives, bonuses if they exeed booking numbers, etc.
Naturally there are things to look out for. Insurances, public liability, damage, dare I say it, dodgey booking agents.(had a case recently were a person was told that there property could not be rented, for over a year… so turned up from interstate to find some one in there house, friends of an agent….woops)
Think out side the square for bookings, we have made our place so you can bring all the family pets (very rare and much sort after) kennels for dogs, cat run, even (if you can beleive it) stables for horses or other large animals. Because we are not on the beach front we needed something different, and now we promote directly to all animal clubs, and via vets etc.
The property is also totally self sufficient, Solar power (enough to run three houses) 90,000 litres of fresh water. Solar hot water, gourmet kitchen, theatre system, etc… so a little extra to help keep it full. Sorry to go on…
SO yes, extra work for extra results.
Having said that you can buy of the plan units from developers with “garanteed” incomes. some good some bad.
Hopfully this give you some food for thought, sorry to go on.Coast
Hi Coast,
Many thanks for your comprehensive response. I’ve bought an executive lakeside place in a tourist town in New Zealand. It lends itself to home-and-income and I am figuring on holiday letting for the perceived higher returns. I think I will give it a go. Being on hand I can self manage most it of the time (when I’m there), so that may aleviate some of the issues you mentioned.
It seems strange that this method of extracting more income from investments doesn’t receive more air time.
JulianHi Julian,
Although I don’t have any experience with holiday property letting, I thought you might be interested in the snippet about Australians “Love Affair with Holiday Homes” as per this property website:
http://www.iproperty.com.au/Content/Content.aspx?TopicId=3748
BTW [thumbsupanim] it’s a great site which often has valuable bits of info, so it’s worth adding to your favourites and keeping an eye on periodically.
Cheers,
Jo
nice website jo!
holiday rentals. yes there are numerous practicalities you need to take into account in order to turn a buck. check out the novemeber issue of api magazine whcih deals with this in detail
this is what i do
– i self manage
– i do letter drop around the area i live – about 1,000 handed out in novemebr.
– i put up signs at my wifes work and at the local hospital general notice board (big hospital)
– word of mouth (spread the word)– sofar great success. people come past and pick up the keys on the way down and drop off the keys on the way back. we encourage them to visit again. they take down there own linen etc etc
– currently doing a website whivch will have photos, email address etc.
– have a list of tradesman/housecleaners etc fromt he area.i have friends who have used the same process for 10 years for there holiday house on the surf coast. last year they 26 weeks occupied which is huge…returned 20 pct
if you have any questions let me know
ps – local realestae agents dont really cut it. why would they push your place when they have 200 others they need to push. spometime y’ll find they own 3 or 4 themselves – and guess which ones have the best occupancy??
cheers
You must be logged in to reply to this topic. If you don't have an account, you can register here.
