Should you invest in a holiday home?
A holiday home is a great place to escape the hustle and bustle of everyday life. It can provide you with some additional rental income too! Just like any real estate property, a holiday home is a serious investment. You need to make sure you have the right information before taking the leap and buying a holiday home in Australia.
What is a holiday home?
A holiday home, also known as a vacation property, is a piece of real estate used temporarily (usually less than 30 days) in a year. As the name suggests, a holiday home is for leisure and recreation.
Owners can rent out their holiday home to other holidaymakers and earn some extra income. Holiday homes are typically located in neighbourhoods close to popular holiday spots.
Will a holiday home be a good investment property?
A holiday home can be a good investment opportunity— if you do it right. To turn your holiday home into a profitable investment property, you must make sure there’s a market for it. Research the local area to see if there’s enough holiday rental demand to make it a worthwhile endeavour.
A great thing about holiday home rentals is how convenient it has become in recent years. Today, you can go on apps or websites like Airbnb, Stayz, and VRBO to advertise your holiday home for rent. No need to go the extra mile to advertise and connect with possible tenants.
Are there legal requirements for a holiday rental?
A holiday rental is considered a non-hosted short-term rental accommodation. The guidelines you must follow depend on which state or territory the property is in. In some areas, there’s a strict limit on how many days a holiday home can be rented out.
In most cases, there is a 180-day cap for short-term rental accommodations. This means you can only rent out your holiday home at most 180 days in a 365-day period. Look into the rules in your state or territory to see what requirements you need to follow.
Pros and cons of holiday homes
Holiday homes come with benefits and disadvantages. Weigh these pros and cons to see if owning a holiday home is worth it:
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Pros of Buying a Holiday Home |
Cons of Buying a Holiday Home |
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Tips for buying a holiday home in Australia
If you decide that owning a holiday home is right for you, here are a few tips that can help you buy the perfect property:
Know what you want
Ask yourself why you want to buy a holiday house. Is it for personal vacations, renting it out, or a bit of both? Also, think about how often you’re going to use it. Understand your needs as a homebuyer. Once you’ve figured out your goals, let those guide you while you’re shopping around for properties.
Find the perfect location
Location is everything when it comes to real estate. It becomes even more important with holiday homes where the location is a huge part of its allure. Survey your options and visit the area a few times to get a feel of the neighbourhood.
Consider ongoing costs and insurance
Aside from the cost of buying a holiday home, you need to think about maintenance costs, stamp duty, taxes, and insurance fees. Holiday homes need regular cleaning and upkeep too. You need to factor in these extra costs while doing your budget to avoid any costly surprises.
Get pre-approved for a home loan
A holiday home is a huge purchase. You need to get your finances in order and set a budget. One of the best ways to do that is by getting a pre-approved home loan. With a loan pre-approval, you’ll have a price range to work with when you’re looking for a property. Get pre-approved at loans.com.au today by filling out this online form.
Ready to buy a holiday home?
Contact one of our friendly lending specialists and get an incredible low rate home loan for your holiday house. We have a range of investment loans for you to choose from! Find a loan that fits your needs perfectly.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
