Investing in a holiday house? Location is everything

Before you take the leap into a holiday-home investment, it is essential that you consider all angles. This means taking your heart out of the equation and giving thought to rental returns – which means location really is king.

When deciding whether or not to buy a holiday house or unit as an investment, you would be best served to consider location first. In fact, location has a great deal to do with the success of your investment property if you will be renting it as a holiday destination.

“Sometimes people are torn between where they would prefer to holiday as opposed to looking at the logistics of what will rent better, and what niche markets they can target to provide better rental returns,” says Accom Holidays Director, Brent Pilkington.

You need to make sure that your property location matches up with market demand. Things to consider are travel time and expense, rent rates, local attractions and activities.

“The best rental return properties on the coast are in busier suburbs, but often holiday rental buyers are looking at some of the peripheral suburbs that are quieter,” explains Pilkington, “That’s when it’s ruled by their heart rather than their head, and they can end up with a property that may be popular through peak periods, but that delivers much more seasonal rent return.”

Pilkington suggests taking occasional markets into consideration too.

“I think the key thing is to choose areas that are not just holiday locations. Somewhere that has other things going on besides holidays. This means that when it’s not the holiday season, there are still other reasons for people to visit your area,” says Pilkington.

Deciding whether the investment holiday property you want will be as lucrative as you think often requires the advice of an expert, particularly for investors who aren’t as familiar with the area as residents may be, so investors would be well served to seek advice instead of taking a gamble.

Before you start looking for that perfect holiday home, get in touch to see how we can help with the finance

Tiny houses

It’s easy to understand why we look for the largest, most prestigious properties we can afford – we are constantly urged to define our success by our possessions- bigger, better, newer, faster, shinier. A relatively recent counter-movement, however, urges lower impact, fewer goods and less consumption, and at its core nestles the tiny house.

With the price of property ownership creeping skyward across most parts of Australia and leaping into the stratosphere in others, a big home isn’t always affordable to buy. Add the cost of energy and living, and big isn’t always affordable to maintain, either.

With the boom of environmentally friendly housing and a return-to-basics design mentality, a trend for micro housing has cropped up, producing some positively diminutive living arrangements.

Whether it’s a one-room cabin with a loft for a bed space, a Japanese tree house or a converted shipping container, the trend in minimalist shelter has well and truly skyrocketed.

Despite how innovative those ideas are, there is no denying that they aren’t suited to everyone. What could apply broadly, however, are their lessons in downsizing. Not only can people save money, but they can save time and energy, too. It’s a good idea to consider the following benefits of smaller housing before buying the biggest home you can afford.

  • Less expensive. Small homes tend to have smaller price tags. This can be the difference between living comfortably while saving for your future or an investment property, or worrying about what will happen if the market turns. Less debt also, generally, equals lower risk
  • Energy efficient. Having fewer rooms to heat and cool saves on energy costs and lowers your ecological footprint, too
  • Less maintenance. Big houses generally mean more maintenance. This applies to the week-to-week cleaning as well as the big responsibilities, such as clearing gutters, mending fences or painting walls, which can’t be shirked if you intend to protect your investment
  • More time. All of the above leads to time saved for everything else. The more money and maintenance required for the upkeep of a home, the less time you have. For many, this is a lifestyle choice, but an important one nonetheless
  • Easier to sell. Smaller, more affordable homes are less likely to end up stranded in the property market. The more people who can afford to buy your home, the easier it will be to sell in future.

While some lenders will only finance properties over a minimum square footage, a Mortgage and Finance Association of Australia (MFAA) accredited finance broker has access to a broad range of lenders and loan products to make sure they can find the perfect one for a tiny home. Get in touch today to see if we can help you on your journey?