Hey guys,
I don’t seem to find much information in the magazines etc about fully furnished holiday house type rentals. What are the PRO’s / CONs, and has anyone on here done one successfully?
As far as I can see –
Pros – You can get some accommodation for yourself in that area if it’s not rented, high rents,
Cons – Vacancy rateIs it normal to get higher rental yields than a place next door not furnished that is rented full time?
Nick
I have no experience in this field but I guess it is all about occupancy rates. From what I have seen when looking for accomodation, ther is the potential to double or treble a rental income but then you need the right agent/advertizing to get maximum occupancy. There would also be the regular cleaning and maintenence costs and I suspect significantly higher insurance costs.
Cheers…. was considering that too, but even with twice the rent…… you could basically have a 50% vacancy rate, and if not….. you’d be rolling in it?
Pros:
Higher Rent
Higher Deprecation.
Residential Tenancy Act doesn't apply on leases <60days or for Holiday Accommodation.
High end market is often corporate tenants.Cons:
Higher management fees & advertising costs.
Higher maintenance costs.
Costs to maintain furniture.
Most banks don't take rental income into account if lease is <6m or not a proper lease.
Higher vacancy rates (not always).
Very volatileI already have a duplex that is in a low capital growth area, easy to rent + a townhouse and a Unit in high growth area’s, both of which are + cash flow ….. was thinking that holiday rental would be a way to justify building in a more expensive suburb on the ocean vacant block, with high capital growth? + rent while it’s held or b4 it’s moved into?
i think the biggest con is that vacancy rate. The list of pros and cons by kent is pretty good. If you can find actual holiday homes that give you higher retruns and the pros outweigh the cons, then go for it
looking at renting my coastal property in south aus, what is the best and most accurate way to find out holiday vacancy rates?
cheers
We have a holiday rental in Victor Harbor SA. We manage it ourselves, advertise through Stayz and are very happy. Had it for 18 months, we get way above average for the area bookings. IE I already have half of July booked, and most people say no one goes to Victor in July. I turn away more bookings than I accept, as we are pretty fussy about who we let in.
It is in the higher end of the market.Lucky as we have family in the area who clean and maintain it. (at comerical rates) we borrowed most of the purchase cost, and after depreciation it is cash flow positive around 10K. Plus we still get to go sometimes ourselves.Wish we had 10 of them.
Waydo, I dont know how you would find holiday vacancy rates? But yyou must do your sums on local knowlege and a dose of common sense. If it was only rented school holidays and Easter who would you feel about it then?
We bought our place just for ourselves,initially, but then the rental returns were too good to ignore.
So it is really just what you are comfortable with.thanks saffy,
im thinking about ringing some local holiay rental places to find out demand and likely vacancy, Do you offer some kind of specials in the low periods like pay 5 stay 7, or half price in winter? Im hoping with a bit of thoughtful advertising and decent staged photos I can get the vacancy rate a little lower than the norm.The place I plan to holiday let is currently my por but planning to move interstate for a couple years, so its either residential let at 400pw or more like 600pw as a holiday rental, located on eastern side of yorke peninsula.
It would fit 2 families and is of a higher standard and newer than all other holiday rentals n the area, so I belive my returns should be good.
what are your thoughts saffy, sorry to hijack this thread chopper..Would you get $400 a week resdiential? At only a 50% difference for holiday let, I would go with the permanent. Usually the variation is much higher for a hoiday let. As management costs (if you are not doing it your self) are much higher. A lot to consider like linen? will you provide it? or bring their own? We have 2 sets for each bed and the cleaners change and launder the sheets, but many wont do that.
Our apartment ranges from $700 a week midwinter to $2500 Christmas/ New Year/ Easter. Permanent rentals in the block are around $250 a week.
Would you get $400 a week resdiential? At only a 50% difference for holiday let, I would go with the permanent. Usually the variation is much higher for a hoiday let. As management costs (if you are not doing it your self) are much higher. A lot to consider like linen? will you provide it? or bring their own? We have 2 sets for each bed and the cleaners change and launder the sheets, but many wont do that.
Our apartment ranges from $700 a week midwinter to $2500 Christmas/ New Year/ Easter. Permanent rentals in the block are around $250 a week.
Dachoper,
We have had very similar discussion in next forum link below. But roll toward end because discussion more or less ended with topic of yours. Also from tax point of view.
https://www.propertyinvesting.com/forums/property-investing/help-needed/4344082waydo77 wrote:looking at renting my coastal property in south aus, what is the best and most accurate way to find out holiday vacancy rates? cheersThat's easy look at usual holiday periods, this will be time when holiday homes are in demand:
Xmas
Easter
School holidaysWe have a beach house which we now rent.
Also, for those considering renting during peak holiday periods and expect to achieve high returns the property must be very well presented, in other words, reasonable furniture which is in good condition,…. they expect the property to be fully equipped – BBQ, DVD players…… the list goes on. Has to be a good package, as this is what the competition will have.
Cheers
WIThanks guys, this is the type of discussion I was hoping for. I think that I will give it a crack. Capital gain is too good to turn down. Also – for the size of the outlay, the inclusions are rather minute in comparison
i think one way to figure out the vacanacy rate for a holiday home is to call up local property managers and ask them their thoughts
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