Pros and Cons of Owning Holiday Homes

(Information in this article is courtesy of Realestateweb (Holiday homes: The pros and cons – 19 November 2007)

While on holiday this year, some might become so bedazzled by the local scenery that they might decide to buy property in a holiday destination. Real estate agents in these areas are already gearing up for, what might be a busy season for them.

If you look at the advantages of owning a holiday home, flat of apartment you’ll see that having an investment like a holiday home, it might earn you some income on the long run or even open the door for rental income.

Absa recently pointed out that a holiday homes, apartment or even vacant land can also serve as a collateral for other debt.

If you are buying with the financial help of a bank you have take in consideration that this might put a lot of strain on your income. If you want to use the property occasionally, you are going to have to rely on short-term tenants like holiday rentals. Expect to do most of the marketing for this yourself, seeing that there is a shortage of short-term rental agents in South Africa.

There is also the possibility of the interest rates rising, in which case you will have to pay more for your holiday haven. Another big expense might be cleaning and maintaining your property in between visitors’ stays.

Other disadvantages include higher maintenance cost because of the proximity to the coast, as well as the fact that sea or mountain views are not preserved and can impact your property’s value. In tough market conditions you might find it hard to sell you property.

There are, however, a lot of advantages to owning a holiday home; if you do your sums carefully and make wise decisions you will reap the rewards. If you are not planning to use the property often and not planning to rent it out, it might be smarter to invest in a different kind of property all together.

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