select
|

Top 5 tips for holiday home purchases

As the year winds down, many South Africans will be making plans to spend some time in the country’s top leisure destinations over their holiday period, says Adrian Goslett, CEO of RE/MAX of Southern Africa. 



He notes that this is the ideal time of year for buyers to get a feel for the property market in these areas, especially if they are planning on acquiring a leisure property.

“As the momentum within the property market continues to gain traction, it can be expected that the demand for holiday homes will gradually start to increase, which means we are likely to see slow but steady growth in the leisure property sector of the market,” says Goslett. “With the large number of inland holidaymakers visiting the coastal regions during the months ahead, we can expect to see the number of property transactions within these areas increase.”

Goslett notes that areas like the Atlantic Seaboard in the Cape, the Garden Route and the KwaZulu-Natal north coast are likely to see an increase in demand for luxury and leisure properties, as are the Big-5 areas in the northern regions of the country.

“Those who can access the necessary finance can escape to a second home that is away from the hustle and bustle of city life to enjoy the lifestyle benefits these types of properties offer,” says Goslett. “With the numerous leisure hotspots through South Africa, buyers are spoilt for choice when it comes to choosing a location in which to purchase a holiday home. There are several locations that offer buyers a range of properties in a variety of price brackets throughout South Africa.”

He adds that property is considered to be a strong asset class in which to invest, particularly over the medium to long term. A leisure property can prove to be a home to enjoy as well as an investment that generates healthy returns. “However, as with any property investment, when looking to purchase a leisure property there are several aspects that buyers should consider to before deciding to commit financially,” advises Goslett.

He notes that buyers need to look at the key factors that will impact on the property’s investment potential. Goslett provides the top five tips that holiday home buyers should consider carefully:

1.      Location

The importance of location should never be underestimated. “It’s not anything that hasn’t been said before, but location remains ever important. Buyers need to ensure that they research the area and establish the level of property appreciation it has achieved over the past year. Other factors to consider are how well maintained the area and its facilities are, as well as the general market conditions prevailing in the suburb,” says Goslett.

2.      What the future holds

Goslett advises that property should ideally be viewed as a long term investment, so buyers should not just look at the area as it is now, but must take into consideration the future plans and possible development in the future. He notes that where possible buyers should find out what infrastructure or development is planned for the region, along with zoning and transport routes or nodes that may affect the tranquillity of the area.

3.      Finance position

“A holiday home should provide you with a place to relax, and not be a source of stress and financial strain.  Before venturing into any leisure property investment it is imperative for holiday home buyers to consider their financial position, paying particular attention to the acquisition costs such as a deposit, transfer fees and conveyancing fees,” says Goslett. “Other aspects that also need to be considered are the impact of possible interest rate increases, ongoing monthly maintenance, security and insurance costs as well as the rates, taxes and utility tariffs in the area.”

4.      From a distance

According to Goslett, holiday home buyers should also consider the practical implications of owning and managing a property in a different town. “It might be necessary for the owner to hire a professional property management company that can conduct regular inspections and screen, select and place tenants. These fees need to be added into the overall budget,” advises Goslett.

5.      Use it or lose it

Although it is possible to receive a rental income from a holiday home during the times when the owner is not using it, there is little point in keeping a holiday home that is seldom or never used by the owner. Goslett says that before purchasing a holiday property, the buyer will need to establish whether the cost of owning and maintaining the property is worth their while. It is far better to focus on paying off a primary residence, than it is to incur debt on an additional property that will not be used very often.

“As with any property purchase, a good investment decision will be based on the buyer doing all the necessary homework and comparisons. Buyers must be sure that the investment they are making is worth the financial commitment they are laying down to acquire it,” Goslett concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 25 Apr 2018
      Whether you are a seasoned seller or new to the game, putting your home on the market is an exciting moment. To ensure you get the best possible outcome these 8 value adding additions to your home is worth the effort.
    • 25 Apr 2018
      After four years of unprecedented growth fuelled by semigration, the Southern suburbs market faced a number of challenges in 2017, including dwindling affordability and a marked slowing in house price growth with many sellers forced to lower their prices in order to secure a sale.
    • 25 Apr 2018
      Mall of Africa, is celebrating its second year of sensational success. This splendid super-regional shopping centre first opened on 28 April 2016, and has grown in popularity, performance and profile since then.
    • 25 Apr 2018
      While the role of trustee in a sectional title scheme is a voluntary and unpaid position, it is one that comes with huge responsibility. Trustees have a fiduciary duty towards their scheme, says Chinelle Hewit, Operations Manager at sectional title finance company Propell.
    • 24 Apr 2018
      The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK