Holiday homes. Anyone doing it?

[whitt]

Have been thinking of maybe going done the track of a holiday home.
I see there was a seminar the other month too.

Has anybody done it successfully?
Is it a viable option to cover the expenses during the year or just a hassle?

I heard some people only use websites and get good responses for bookings. Any ideas on good ones?
What sort of booking rates can you expect?
I found www.holidayhouses.co.nz which seems to have lots of listings.

[Monid]

Hi Whitt

I believe Gatekeeper does this quite successfully. There were some excellent discussions on it a year or two ago, so it might be worth a search.

Cheers
David

[NZGEMS]

I have a few Whitt, they work out just as well usually return wise as a normal rental as when they are rented they rent for way more than you normaly get a week but you would still want to be sure you bought in an area where there was a year round demand.

Many holiday homes are seasonal and if you dont do your homework properly as I didnt with one of ours you might just find you have a nice negatively geared property. So I have one that doesnt give a great return and 3 that are ok.

Nice if you want to use it yourself now and again too, just have to book ahead in the popular times that is all. They are often booked over a year in advance for the peak times so you cant go at short notice unless you just block that time out and if you decide not to go nearer the time release it again as it will still normally let at peak time even at short notice.

[whitt]

Robyn
How do you get your bookings. Website or agents?

[Gatekeeper]

Hi Whitt,
I have my own main website and I'm on a couple of paysites like http://holidayhouses.co.nz and http://holidayhomes.co.nz, these two plus the Govt. sites like newzealand.com are my best referrers. There are many mediocre holiday home sites around.
That's the only marketing I do. Just looked at my figures and I'm up to 80% occupancy.

Robyn is very correct about needing year round renters.

[whitt]

What would you think of Taupo.
seems to be popular in summer.

[hort1]

Hi Whitt

My wife has a property management business down here in Turangi bottom end of lake Taupo.
She has a lot of holiday rentals,
Some do a lot better than others, it has a lot to do with location, cost, facilities, for example the houses on the lake edge demand a far greater cost for your stay as against one in town. Sure it is seasonal but a place like Taupo and surrounding areas has a lot to offer all year fishing, winter skiing, the race track is going to attract a big need for accommodation, Taupo has a event just about every weekend. My wife is away for a couple of days and I am left booking houses for the Easter weekend, just booked the last available one.
If you would like to talk about any queries I can PM you a phone number.

[tim360]

If you're serious about maintaining a high occupancy then you'd want to target an area that has more than just the 3 months of summer as the peak season. Queenstown is an example where summer and winter are considered to be peak, with the shoulder seasons being the few months in between.

You can maintain occupancy in the off season by tapping into the conference and corporate market, depending on the type of property.

[whitt]

yes Queenstown and Taupo are ideal I think.
Have property In Taupo already so was thinking of buying another.
Just not sure on if it is better returns than renting the standard way.
or if a house in Taupoo would be better than a small bach type near Turangi

[Avalon]

I considered this as a way of buying something I would eventually live in - but being able to get it at "todays price". I even found the house I wanted The problem was that as it is in the Wairarapa, if at the beach, the available rent and the cost of management made it too expensive for us to top up right now. Apparently our market would be weekending Wellingtonians. I had considered the possiblity of a long term winter let but it looks like that is not really an option for that area.

Management fees were 15% +gst. I felt for us it would be worth it if I wanted to do that management myself, but at heart Im just too lazy for all that.

Its still on a back burner - and would be do-able if I didnt have a home mortgage to pay

[muzza]

just for interest Whitt, my first investment property purchase was a holiday home in matarangi in 2001, we rent it out over summer and is available for rest of the year also, but when its not being rented we use as much as we can, we use blue penguin and richardsons to manage them, as is available for rent all year round we claim on all interest and depn e.t.c.
best part though...purchase price 200k and get this we got cv last week of 690k (and would be pretty close based on recent sales)
every couple of years we update our rv and use this equity to increase our rental portfolio

[whitt]

Fantastic Muzza.

With a place like Taupo etc I suspect it would be more than just a summer holiday home.

[hawkeye]

We did it successfully in Martinborough and sold the house as a going concern when we moved to Christchurch from Wellington. The market was weekending Wellingtonians. Your house has to have a twist. Ours was four large bedrooms and two bathrooms close to the central square. Not many houses with that capacity and wedding parties liked the two bathrooms.

We also did short term accommodation on Mt Victoria in Wellington and that was much more successful than we ever imagined almost causing us some issues with GST because of the cashflow. (We didn't want to be GST registered in the ownership structure that owned the property)

I still have some spreadsheets we did for perspective buyers of our Martinborough properties if anyone is interested. I also have the details of the Wellington property. Two bedroom lower flat in Claremont Grove.

[Glen]

Holiday homes

Whitt
We list two of our rentals at the moment with www.holidayhouses.co.nz/8119

2 x 3 bedroom townhouses,fully furnished.
We rent these mainly through an english language school at between $450-$550 per week each, for 10+ week blocks and let them out as holiday type accommodation in any down time(i.e. between courses)at $100-$200 per night(Negotiating with a UK family at the moment wanting 30 nights in June at $120 per night).

We find the Holiday Houses site works really well for us, and it's only $90 per year advertising for the first property and reduces to $45 each for any others.

We live close to these two, so it's handy to manage myself (laundry, cleaning etc), but if you were looking at doing this in another town from where you live , and intending to get someone else to manage them for you, then you would have to factor in the management fees.
From others i have spoken to about this, the fees can be around 20%.
I prefer/enjoy doing this myself at the moment.

Otherwise it's definately something to look at, to get that 'twist' in the current market.

Also we are looking at changing some 4 bedroom villas we have close to town, into short term (weekly rates) backpacker type rooms.....more research to do on this yet though.

Good luck!
Glen.

[whitt]

Thanks team. Definitely something to look into