Have you considered purchasing a second home? Perhaps a rental income and a free vacation? A place to retire one day but like to buy now? If you have, don’t rush into a purchase right away, ask yourself the following questions:
What is the real purpose of your purchase? Is this just that you like the area you are holidaying in? Do you think it is / will become a popular holiday destination? Are you looking for a fixed location to holiday every year without the hassle of booking?
What is your end goal? Are you aiming to live in that property in future years or will it remain an investment? Does it make financial sense as an investment?
Here are 5 hints to consider when purchasing a vacation home:
- Choose a prime location
Choose a prime location with beach views near all the restaurants, cafes, shopping centres, and tourist hubs when looking for holiday investment properties. High occupancy rates during peak periods are guaranteed.
- Holiday property values are volatile
The value of this type of property goes with the economy. During good times, the value can be high but it can decline during a recession or if other holiday destinations rise in popularity. Holiday property owners need to consider the economic factors when making buying and selling decisions.
- Taxes
If your holiday home is being rented and generates an income, this is required to be declared in your income tax return.
- Learn how holiday rentals work
Holiday properties in popular locations are in higher demand, but only for prime properties. The average period of high demand for holiday rentals in popular locations is 8 to 10 weeks per year, with demand decreasing during the off-seasons.
- Consult an expert
Micah Finance Solutions helps clients create income for life. We have been in the finance industry for more than 15 years and have helped clients with million-dollar wealth succeed further. Our simple formula can really make a difference in your future.
Leave A Comment