3 factors to know about before investing in a holiday home
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Buying a holiday home is a dream for many South Africans - and for good reason. The thought of having an investment that can both enhance your wealth and give you a place to go on holiday is extremely appealing. As summer comes around, holiday homes become a 'hot' topic, and Jawitz Properties takes a look at three factors you should think about before investing in your dream holiday home.
Factor #1: Know about the future of the area
While the current price of a property that you're considering buying will naturally be the first thing on your mind, you also need to think about the future value of your investment. Make sure you're extremely familiar with the area and ensure that the holiday home you buy is in an area that's accruing value.
Economic factors aside, it's also a great idea to consider whether the area is growing in terms of its infrastructure. Take the time to think about what impact future growth in the area would have on your investment and your enjoyment of your holiday home. On the one hand, if a new shopping centre or beach boardwalk were to be constructed in the area, you'd enjoy using these amenities and your property would likely become more popular among holidaymakers. On the other hand, however, if your sea view were to get blocked by a new high-rise apartment building or if the area became more congested, you may be less enthusiastic about spending time there.
Factor #2: Know about the costs you might not have thought about
Over and above the cost of financing the purchase of your holiday home, there is an array of once-off and regular costs associated with owning a second property. Most of these once-off costs tend to crop up when you first buy the property. These costs typically include renovating or repainting the property, as well as paying for furniture, appliances and curtains. Depending on what your holiday home is going to offer, you may also need to pay for things like air conditioning, linen and kitchen utensils. On an ongoing basis, you'll need to pay for rates, utilities, levies or homeowners' association fees (if applicable) and security costs.
There are also WiFi expenses, pay TV services (think DSTV or Netflix) and cleaning services that will need to be paid for on an ongoing basis. While a holiday home can be a great investment, getting it all set up means outlaying some capital.
If your dream holiday property is on the coast, you'll need to consider that municipal rates in these areas are often more expensive than inland towns. You'll also need to budget for the higher maintenance costs that come with owning a property near the ocean.
Factor 3: Know about the demand for holiday accommodation in the area
Over and above enjoying your second home as a vacation destination, you'll likely want others to rent it out when you aren't using it. This means you'll need to make sure that there's a demand for holidays properties in the area - both in and out of peak season. On a similar note, you'll need to think about whether you're going to enlist the help of a managing agent to help you make the most of your investment. This may be an essential step, especially if your holiday home is far from your usual residence.
Jawitz Properties has decades of experience in helping South African families buy holiday homes. Let us put our wealth of knowledge to work and find you your ideal vacation destination. Contact us today and let's get started.
Author: Jawitz Properties
