Tips for Investing in a Holiday Home

In the past, people often built holiday homes for two major reasons. Many did so to acquire a new home in a different setting to enjoy future retirement. Alternatively, people built holiday homes because they loved travel and wanted to build a presence in their favorite destination. In recent times however, building a holiday home has become even more popular because it is seen as an opportunity to invest profitably in real estate. This is especially true in view of the rise in digital real estate marketplaces like airbnb and the trend of remote work. 

There are several different types of properties that can be used as holiday homes. These include apartments, townhouses and more. Additionally, these holiday homes can be offered or leveraged in different ways such as for sale, for rent or short term stay, leases, timeshares etc. While this shows the viability of holiday homes as investments, it is important to research and seek expert advice before you begin your journey. Here are some important things to consider before investing in a holiday home.

Self Use

One added benefit of investing in holiday homes is that you can use them yourself. Many first time buyers of holiday homes use them for certain periods of the year and put them up for short term rentals during other periods. Indeed, if your intention is to use the property for short term rentals or leases, you can use the property for personal reasons like holidays, and family events. This versatility translates to financial gain as you can keep the asset you invested in while generating income from it when you need it. This is important to many holiday property investors and homeowners. 

Location

Location is important with every property investment. But with a holiday property, you’ll need to make sure it is in an attractive destination especially in relation to tourism, in order to maximize your investment. Travel for tourism and business seems to be back on the rise after the impact of the covid-19 pandemic. In fact this is true with domestic tourism (staycations) as well as international tourism. Thus to cater to these target groups it is advisable to build or buy in areas that are accessible, naturally beautiful and close to other essential holiday attractions and facilities. Compared to longer-term properties holiday properties can be much more profitable. 

Design & Maintenance

Holiday properties may cost more to buy or build in the first place. Holiday properties in exclusive areas with good potential for luxury or leisure are often more expensive to buy in the first place. This may be as a result of their popularity among both local and international tourists and business people which drives up demand. Moreover even when building from scratch, there is the need to invest more into the property to achieve the standards that potential clients are accustomed to. 

Again, it is important to protect your property from increased wear and tear. Because of frequent changeovers in tenants, a holiday property will probably be subject to more wear and tear than a standard home or residential property. It is advisable to consider the cost of future maintenance including repairs and replacements when deciding to invest in a holiday home.

Alternatively, one should consider the choice between using the services of a property management company and managing your holiday property independently. Managing holiday properties independently can involve much more work. This is particularly the case if you decide to deal with admin, changeovers, cleaning and any emergencies yourself rather than using an agency to deal with these tasks.  Furthermore you will still maintain responsibility for costs like utilities even if you rent out your holiday property for short term periods.  This option however, gives you more control over your property and returns. Alternatively a property management company can allow you to enjoy the benefits of your property with less hassle at a cost.

Marketing

Holiday property occupancy is seasonal in most cases. You may have full occupancy in certain periods that are popular with travel (festive seasons) and during major holidays but a property could be empty at other times. Thus it is important to market your holiday property professionally to attract tenants. Good marketing is probably the key to making a holiday property into a good investment. There are several ways to market your holiday property:

Firstly, you could sign your holiday property up with a property management company. They often take care of everything including marketing, finding customers, as well as property maintenance. In most cases such companies offer these services for a regular fee or commission on rentals. 

Secondly, you could list your holiday property on an accommodation booking site like Airbnb.com or Booking.com. These platforms are internationally renowned and trusted, in addition to being convenient. In fact both Nigeria and Ghana are among the fastest growing markets for Airbnb. Furthermore, these apps will generally cost less than using a full service property management company but you will need to take care of admin, maintenance and changeovers yourself. You will also have to be more involved in the marketing for your property.

The final option is to market your holiday property yourself. You might do this by setting up your own website and using online and offline advertising (such as word of mouth, event advertising etc). This method involves more work but often generates high returns. Contact Seso Global to find out how to start your real estate investment journey.