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Another great read on how to have a holiday home that earns you $$ - Sue Tierney (writes for NZ Property Mag, APIA etc) kindly contributed the article to PropertyTalk.
My parents kind of do. They have a place in Australia that they probably only use 2 weeks are year if that.
The rest of the time it is let out by property managers. Helps pay the bills and means the place doesn't sit empty. Down side is increased wear and tear.
It is not all plain sailing as often the times you want the house are the times everybody else does too - so that can affect the income side. You have to make adjustments for when the holiday home was not available to rent and apportion all costs accordingly.
And you have to pay careful consideration to items of personal value that could get damaged - that Monopoly set that's been in the family for three generations, for example.
Also you can't spontaneously zip across to the holiday home of tenants are using it.
Tenants do expect a certain standard, even in a holiday home, and are less likely to be concerned with water and septic issues that some holiday areas have to contend with.
I have known of a number of people who have tried it (I used to live on Waiheke Island) and decided in the end that the returns didn't justify the effort.
Julian
Gimme $20k. You will receive some well packaged generic advice that will put you on the road to riches beyond your wildest dreams ...yeah right!
I have run a small cottage in wellington as holiday accommodation for five years now. I live local and I'm hands on.
I've worked up to getting around 70% occupancy year round, and tripled my net profit compared to when it was a full time rental.
I get a lot less wear and tear than a normal tenancy, and in five years my breakages have been negligible even though I'll take kids and dogs, mainly just broken wine glasses and cups, normal stuff. I would never do this through an agency, I'm sure the results would be quite different. The occupiers have to leave the property clean or pay a cleaning fee on top. Most will do the cleaning rather than pay.
All good so far
Find The Trend Whose Premise Is False - Then Bet Against It
Short term corporate or holiday lets will return much more than residential but the key is managing to get a good occupancy percentage - not always possible depending on location, type of property and the effectiveness of the marketing that you do on the property.
You can do it well and be in control of when you personally can use the property but this means investing more time in managing your property and the bookings. Finding a good caretaker or living locally is essential.
For any UK resident forum visitors don't forget the introduction of SIPPs in April 2006 which will enable you to take advantage of large tax incentives for investing in property.
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