Comments on: Do Holiday Homes Make Good Investments?

By: clancybirrell

clancybirrell — Wed, 16 Feb 2022 04:41:20 +0000

Great advice and insight. Thank-you greatly.

By: mjroscoe

mjroscoe — Wed, 08 Jan 2020 08:01:31 +0000

This made me smile so so much, thank you for sharing. I'm sure your wife considers herself incredibly lucky

By: Simonp

Simonp — Tue, 13 Feb 2018 07:47:27 +0000

That really is a brilliant summary, Steve. We bought a holiday house we “fell in love with” a little over an hour away from where we live. I thought it was a lousy investment, but my wife had her heart set on it, and pleasing her has been my best investment throughout our lives. Realistically it only rents out about 3 to 4 weeks a year, all during school holidays, which pays the rates, but nothing else. Fortunately our kids are no longer school age, so we tend to enjoy it outside of peak holiday periods. Being available for rental all year gives us some tax advantages, but it will never be income generating. Capital gain has been acceptable, value doubling in 12 years. Was it worth buying? In financial terms, no, but to see the smile on my wife’s face and hear the sigh of relaxation as she puts her travel bag in the bedroom is more than worth the purchase price

By: Southern Battlers

Southern Battlers — Fri, 12 Jan 2018 09:19:30 +0000

Great article, when my wife & I got married (34 years ago) there was a shack in the family that my mother-in-law & her sister had built on a secluded beach in the 1950 era. It was a bit of a oddity in that the land was rented off the local council for a yearly fee (an absolute song), but the trade off was the plot was Roadside Verge & as such could be claimed back if or when the local bridge crossing a creek needed upgrading. Over the years the family had many great times down there that added to the growing history that we all look back on.
In the late 90s’ my wife & I began our investing in rental properties, which gave us a new perspective on what to do with hard earned money. Over that time many freehold properties came up for sale in this beach community, but knowing what we had learned over the years with the cost of maintaining a shack we could not come to buying one. The council finally gave us our marching orders a few years back & we had to pull the old place down (actually white ants had done most of the work for us). Our children have all grown up & left home, so we sold up the our family home & have built a new house down the coast from the old shack. From time to time we have rented a shack & had family gatherings in our old beach holiday spot, which is 30min drive by car or 1hr by boat if the pull still gets us.
You are right in what you say in that if a holiday house(shack) is bought it is very difficult to separate emotional use from financial investment. There is always someone who needs to rent their shack out to try & re coupe their costs, which a few times a year works out far cheaper than owning it yourself. If you are looking for an investment property the practical criteria is very focused & intentional. As with our children if I was advising Ben & Brittany I would tell them to get their own home sorted out first (buying), then us the equity in that to step out into investing.

Hope this has been of some help.

Patrick & Jenny, South Australia.

By: Michelle

Michelle — Thu, 11 Jan 2018 06:07:10 +0000

Excellent summary Steve. This has absolutely been our experience with owning a holiday rental property. When we are doing our financial analysis on the property , we find it useful to divide the expected loss (yes, despite our best intentions, it’s always a loss), by the amount of nights we expect to stay there, and consider if we think that is a reasonable rate for what we would expect to spend on holiday accommodation per night. That can be a real eye opener if it’s high!