April 29th, 2013
A number of people are looking into investing in holiday flats. Some people believe one is investing in the best of both worlds, rental income and a free holiday all year round. However when it comes to purchasing property, investors should follow their head and not their hearts. Before making any property investment, ask yourself these questions:
1. Why should I buy real estate?
2. What will be the end result of this particular property?
We look at some pros and cons of investing in holiday properties:
• Ensure you purchase in a prime location
Always choose a prime location that offers beach views. This includes the ‘must haves’ such as shopping centres, cafes, restaurants and tourist hotspots. Some holiday investment properties tend to have a low occupancy rate and no investor wants to suffer because of this. Buy property in a city or town that has major infrastructure.
• Understand how holiday rental work
In a number of prime spots the average period of high demand for holiday rentals is 6 to 10 weeks a year. Rental returns can fluctuate extensively for holiday homes; this depends on the time of year. Holiday properties are far more in demand in humid locations, but this applies for key properties. Things such as sea views and proximity to the beach are major factors that contribute to the success of your holiday flat to rent in Durban.
• Choose self-contained
A number of holiday apartments were initially built for short-term renting and thus have smaller rooms. Smaller apartments have a bigger rental return on the selling price however investors should consider a self-contained apartment. This includes a separate kitchen, bathroom laundry, bedrooms and larger rooms. This type of apartment offers you more capital growth and this allows you the owner the option of moving in at a later stage should you wish to live near the beach.
Visual Courtesy of : safarinow.com