The Holiday Home
With wrapping paper thrown about the house, the peak of the holiday season has commenced for most Americans. It’s that time of year to consider spending your next holiday season away from all the chaos. The holiday home is a popular investment families and couples look into for a high ROI with an added personal bonus of a tropical oasis vacation. There’s a time and place to invest and now is the time to start looking to get the most bang for your buck and generate a healthy side profit heading into the new year.
Should I buy?
Investing in a holiday home is a win-win situation for the type of homeowner who is ready to make a large investment. It doesn’t always work out for those who aren’t in a position financially to make that type of purchase. Owning and managing a second property is a full-time job that may not be in your best interest if your hands are already tied. However, it’s the perfect side project for a new retiree looking to stay busy.
If you play all your cards right, you should buy. But here are all the finite details you’ll learn the hard way without the proper knowledge and tools to be successful in owning a second home.
Holiday let mortgages are needed for owners who stay in the home themselves while also letting the property to vacationers throughout the year. These are typically more than a residential home loan and may require a specified minimum income.
Hiring a property manager is essential for owners who live far from the second home. Local agents who know the area are a great resource to act as a trusted property manager.
Marketing the property is a second job in and of itself that can be overseen by a hired professional. The larger the assortment of target markets your home appeals to, the more successful it will be in booking quickly. Holiday homes are often advertised on platforms like VRBO or Airbnb for ease of booking.
A second home can provide a steady stream of income that is most likely your second source. This means, you must declare the second income from the home on your tax returns.
Guests are not always as respectful to others’ property as the owner may expect. Maintenance repairs could become routine to fix any damage done by a guest. Be prepared for this expense!
Taxes and utilities are in your court when you’re letting a home. Planning ahead could mean including a standard percentage markup to the booking to cover some of these costs.
Homeowners are liable for what goes on in their home without the purchase of public liability insurance. Trust us, it’s worth it!
The expenses begin to add up when it comes to beginning your holiday home side business. Having the proper funds in place to make this decision is the most essential aspect of deciding whether or not the holiday home is for you. If not now, make it your goal to start saving toward that second home retirement property that you can enjoy years down the road.
Where to buy
The location of your holiday home must have a variety of activities, attractions and entertainment options. Balancing things to see and do with a nice year-round climate is the perfect equation for seeing a high ROI after start-up costs.
On the list of top 5 places to purchase a holiday home:
Kissimmee, Florida: This city remains as the top on all analysts’ lists due to its high volume of vacationers visiting Disney World. The warm climate year-round helps generate a ROI of 26.02% for vacation homeowners.
Destin, Florida: Destin is every family’s dream vacation even if they don’t know it yet. Its beautiful white sandy beaches make you feel as if you’re elsewhere. Although it will never be Disney, there are plenty of attractions and entertainment for the whole family.
Barcelona, Spain: If you’re looking to hope across the pond, this is the best place to invest with an ROI of 18.78%. Barcelona has a rich history with popular site seeing locations for all ages. The winters are mild here with average temperatures around 60 degrees during the coldest months.
Gold Coast, Australia: According to Escape Here, the Gold Coast is the place to invest. The coastline offers high buying potential with surprisingly low property prices. The high demand for housing complements the scenery of beachfront views and beautiful weather.
Cape Cod, Massachusetts: This is a popular vacation site for many families. Those from outside the state as well as Bostonians alike frequent Cape Cod as a “getaway” vacation. The one downfall of Cape Cod is it’s subpar temperatures year round that could steer vacationers away from visiting in the colder months.
The holiday home investment is quite the large investment to make following a holiday season of colder temperatures. It requires the necessary expertise, resources and knowledge to successfully earn a steady profit. With this wealth of new knowledge, you’re on your way to letting your second home to vacationers and even closer to that tropical oasis vacation whenever you please.