Investment Property for Holiday Accommodation Merimbula, N.S.W.
When it comes to purchasing a holiday investment property most people fall into one of two categories
1. Those planning to use and enjoy the property themselves.
2. Those seeking financial gain from their investment.
There may be a mixture of the two, but one need will still be of more importance than the other. This should be a strong influence in your purchase decision. You have several options once you purchase your property.If you are seeking financial gain from your investment property you can choose to either go for a steady but lower yield through permanent tenants or for a higher yield through holiday rentals but take into account that there will be more down time when the property is not tenanted. If you wish to enjoy the property yourself you may decide not to tenant it at all.
Obviously, if you have permanent tenants you will not be able to stay in the property yourself whilst it is tenanted. But it can be a good strategy to tenant the property for a period to cover mortgage expenses, then use it for your own holiday use at a later date.
You can have your cake and eat it too by using it for holiday rentals, but be aware it is during the peak times of Christmas, Easter and school holidays that demand is highest and this may clash with your own holiday plans. You need to also be aware that if you buy a rights managed property you will only be able to use the property for a set amount of time per year, this varies but usually falls into the 4 – 8 week time frame during the off peak season.
In Merimbula there is a good selection of rights managed holiday properties, these tend to be more affordable and have good holiday facilities, such as pools. Rights managed properties have an onsite Manager who takes care of promoting and booking your holiday accommodation and maintains the property, for this they charge an annual management fee.
If you decide you want to have more flexibility for your own use of the property or keep it for your exclusive use (including friends and family) you will want to purchase a property that does not have an onsite Manager with the accompanying management rights. When searching for property always look for the tell-tale “rights managed” statement and if it is not obvious ask the Agent if it is rights managed.
When considering the purchase of an investment property you intend to use as a holiday rental you need to assess the probable income and expenditure. On the expenses side take into account the cost of the management rights (if applicable), body corporate fees, council rates and repairs and maintenance. The location of the property, its presentation and facilities will influence the amount of rent you can expect and good promotion as well as seasonal factors will affect occupation rates. For a thorough analysis of the expected income and expenditure on the property see a qualified Accountant.
Merimbula currently has good quality investment properties suitable for holiday rental available on the market. For more information Contact Fisk & Nagle Merimbula on 026495 4545.