Will a Holiday Rental Make a Good Investment?

A holiday rental is what many vacationers seek because it offers security, convenience, and all the comforts that you would have at home but in a beautiful, relaxing setting. The question is, should you buy a holiday home as an investment? Let’s take a closer look at the factors to consider when looking to invest in property as holiday rentals.

What is a Holiday Rental?

It’s easy to get confused between a holiday home and a holiday rental. Holiday homes are purchased for personal enjoyment. If you want to travel to your holiday property, it is available for you and your family whenever you need some time away. Holiday rentals are properties that are specifically turned into self-catering accommodation that allows people to rent the house while they are on vacation. It is fully furnished and offers the basic comforts of home that most people seek when they go on holiday. It also has a fully equipped and organized kitchen but renters or holiday goers will probably have to bring their own utensils and make arrangements for their daily meals.

Is a Holiday Rental a Valuable Purchase?

When you are looking to invest in property to generate an income, you not only want a successful rental, but you also want the value of the property itself to appreciate over time. Holiday houses or apartments can be exciting investments, but the one downside is that they might not be busy throughout the year. Your highest returns are seasonal and depending on where the place is located, you may or may not benefit from high rental rates.

To benefit from buying a holiday rental, you need to know exactly how to make the most out of your investment. This means knowing where to buy, who your target market is, and how much you can charge for daily, weekly, and monthly stays. You also need to take the seasons into account. You might go through a period of the year where the rental doesn’t make any money at all.

Picking a Location

One of the most important factors when purchasing a holiday house as an investment, apart from affordability, is ensuring that you pick the right location. You want it to offer a prime location and attract a steady stream of renters who will support paying off the loan you might have taken out to purchase the house or apartment in the first place.

The next step is to think about a free-standing house or an apartment as a holiday rental. What are people looking for when they vacation or travel for business in a particular location? Perhaps they want a secure lock up and go in a high end area or they want a single residence where they can bring their family on holiday? Consider the purpose of the property you want to invest in and which of these offer the best opportunity to earn a residual income.

Other Factors to Consider when Choosing a Holiday House

Property Condition

Before you make a purchase decision, always evaluate the condition of the property. You don’t want to go into an investment only to find that the house or apartment itself requires repairs and costly renovations. If you are looking at a fixer upper, it is best to get a professional contractor in to quote on the costs of renovation before you make an offer.

Size

Will it be a family home where children can run and play in a secure location or will it be geared towards singles, couples, and those traveling for business purposes? Look at trends in the area to determine the types of holiday goers or demographic for short term rentals. This can help you decide on the property style and the size prior to making a purchase decision.

Surrounding Amenities

It’s all good looking at properties in the middle of the forest or along the coast but if amenities and activities are few and far between, it might not be suited to someone who wants to get to local restaurants and sightseeing. Amenities are also attractive because it appeals to people who are on vacation or short term getaways.

Making the Right Choice

Choosing a property to develop into rentals for vacationers and business travel can be an incredibly rewarding venture but requires a significant amount of research to make the right decision. From the amenities or features in the area to the type of property and the going rates for holidaymakers, consider each of these factors to make an informed and rewarding decision.