House hunting tips: holiday home vs investment property
A holiday home can be a great long-term investment, especially if you pick the right one.
Searching for a holiday home differs significantly from looking for an investment property. While a holiday home can generate rental income during the months it’s not in use, maximising rental income is usually not the primary focus when making this purchase.
According to Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, there typically will be trade-offs if a buyer wants to find a property that can be used as both a holiday home as well as an investment property.
“It will be tricky to find a property that suits your holiday lifestyle needs and has the potential for maximum returns. Understanding which of these aspects are most important to you will help prioritise your search criteria,” he explains.
To help buyers prioritise their search criteria, RE/MAX of Southern Africa explains some of the key differences between searching for a holiday home versus an investment property.
Location for max profit or max enjoyment?
When searching for a holiday home, you want to choose a location that you and your family love and will enjoy visiting regularly. Proximity to amenities and activities that match your lifestyle is key.
With an investment property, you will want to prioritise areas with high rental demand, good infrastructure, and potential for appreciation. Speak to a local real estate professional to understand the market trends and rental demand in the area.
Broadest possible market appeal or personal connection?
When searching for a holiday home, focus on finding a property that resonates with your personal tastes and creates a sense of relaxation and comfort.
On the other hand, an investment property should appeal to a broad range of tenants. Consider factors like size, number of bedrooms, and amenities that are in demand.
Outsourced property management or within driving distance?
Something to consider with a holiday home is who will look after it during the months when it is empty. If you live close enough to it, you can pop in regularly to keep things maintained. You could also hire a cleaning and gardening service to tend to it while you are away.
With an investment property, you can outsource the management of the rentals to a real estate agent – you don’t need to live nearby. They can screen tenants, manage property inspections, and collect the rental income monthly on your behalf.
“With any property purchase, whether it’s a holiday home or purely an investment property, a good investment decision will be based on thorough research. Make sure that the investment you are making is worth the financial commitment you are locking yourself into to acquire it. Reach out to a RE/MAX agent to get some free insights into the local housing market before making any final decisions,” Goslett concludes.
