East, west, make sure your holiday home is the best

As the end of the year approaches, many people are looking forward to some time off – while others are planning to take advantage of the current slack property markets in many coastal towns to buy a second or leisure home that they can let out to other holidaymakers when they are not using it.
However, says Gerhard Kotzé, MD of the RealNet estate agency group, these buyers need to know that the type of property they purchase could be just as important as the location.
“In any holiday town, prospective buyers will encounter a range of property types – including apartments, townhouses, cottages, old and new family homes and of course small and large guesthouses – and they need to consider the pros and cons of each of them not only as regards price and location but also taking into account such factors as maintenance, security, availability, demand and proximity to local attractions and facilities.
“They may be drawn to the space and charm of an older home, for example, but should realise that it will probably take a lot of time and money to keep it in shape. Such properties may be better suited to DIY enthusiasts who live nearby.”
Similarly, he says, buyers should be wary of newer homes being offered at “bargain” prices, as they may require costly repairs or renovations that the current owners can’t afford and they will not be able to be occupied or let until this work is finished.
“On the other hand, a home that requires only cosmetic upgrades such as a coat of paint or a change of carpet is definitely worth a second look – especially if it is well-built and close to the beach and shops.”
Sectional title apartments and townhouses can be good holiday property investments too, as levies generally cover the regular upkeep of gardens and other common areas as well as ongoing security, which is a major advantage for absentee owners.
“Prospective buyers must check, though, that the body corporate rules in a particular complex will allow them to let their unit out to other holidaymakers. They will also be responsible for ensuring that their short-term tenants adhere to the rules as regards noise, pets, parking, use of the pool and so on.”
As for buying off-plan, Kotzé says, this can be risky as the completed unit may not turn out to be what you envisaged. You could also incur holding costs due to unforeseen delays in obtaining approvals, building materials or bulk services. What is more, a brand new unit will have to be fully equipped and furnished before it can be let, unlike many other holiday homes that will come fully-furnished.
“However, since off-plan units are often sold at a discounted price to enable the developer to get the project going, they do offer the prospect of accelerated appreciation in the years immediately following the purchase, provided there is not an oversupply of such units in the area.”
Then finally, he says, you will need to bear in mind that you will probably require a substantial deposit to purchase a second property, and many be charged a higher interest rate on the bond than on your primary home, making it quite a costly investment if it does not attract enough tenants during the year.
“This is why you should always seek out a knowledgeable local rental agent who will be able to advise you before you buy what the demand is for short-term accommodation in the area and the rental returns you can expect.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 25 May 2018
      Reliable public transport systems moving a mass of commuters to and from work, keep a city’s economy moving. Not only do they have a positive impact on economic growth, successful rail links also influence property values.
    • 25 May 2018
      The live, play and visit environment that Centurion Residential Estate & Country Club offers continues to attract buyers looking for a very specific lifestyle and ambiance.
    • 25 May 2018
      As expected, the Monetary Policy Committee kept the repo rate stable, with analysts and market commentators ahead of yesterday's announcement (24 May 2018) pointing to a more hawkish stance amid a weaker rand, somewhat less stable global environment, and an eye on the inflation outlook – coupled with the increase in VAT and sizeable hike in the price of fue
    • 24 May 2018
      Most real estate professionals agree that 2017 was one the toughest years to date; an eminently challenging 12 months that subdued even the strongest markets - including the country’s economic powerhouse of Sandton.
    • 24 May 2018
      These are uncertain and challenging times for the real estate industry, but the non-profit organisation Rebosa is fighting for their interests and finding pragmatic solutions to industry issues such as the urgent need to fast-track transformation says Richard Gray, Rebosa chairman.
    • 24 May 2018
      The decision to invest in property isn’t one that’s taken lightly, or dealt with flippantly. The same should ring true when deciding on an estate agent partner to handle the letting out of your property.
    • 23 May 2018
      Homeowners who are thinking of selling and “trading up” to a bigger or a better home had better be quick now if they want to get the best deal.
    • 23 May 2018
      The new Loftus Park development in Arcadia is really going to boost the demand for homes and rental accommodation close by and the neighbouring suburb of Sunnyside, says Gerhard Kotzé, MD of estate agency group RealNet Holdings.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us