So, with the investment scene not looking too bright right now and travel being restricted, what is one to do? One of our friends is seriously looking at holiday property investments and so we gossiped about that.
Tax filing is around the corner, too. Soon we are scheduled to have a sit down with our investment expert who will go to great lengths to explain the ups and downs - mostly the downs across 2020 that tanked some of our investments. It will be a very sober coffee session.
My friend and I were musing over how the past year has been quite miserable financially, both in terms of income (we are freelancers) and investment performance. She mentioned that an acquaintance of hers was thinking about investing in a holiday property. Apparently, they are evaluating the idea and seeing some strong benefits if they can make it work.
Looks like a good idea to me. I mean, with all the social distancing regulations and avoiding crowds, is it not a good idea for those that need a holiday or want to travel to book a holiday property for a few days? It will meet the isolation guidelines while the traveler can fulfil their travel dreams.
With the right holiday property investment, our friend ought to be able to make a small fortune for that much needed enhancement to the income. Of course, it also means there will be a place to stay whenever she wants. Provided she buys the right place, she won't have to worry about issues like big hotel bills and all the other costs that go with booking a holiday somewhere. I mean, imagine owning your own holiday home!
As we discussed what could possibly go wrong, we came up with three crucial things to do to make your holiday property investment successful - namely:
- Hiring the right support
- Choosing the right location
- Being realistic
Let's explore these further!
3 basic tips to make your holiday property investment successful
Hiring the right support
As Inspector Jacques Clouseau of The Pink Panther series rightly says, no (wo)man is an island. It is important to hire the right support to make that holiday property investment successful. This isn't something that you can DIY completely, much as you might want to.
For instance, you'll need to think about marketing. While it's possible to DIY marketing completely for a holiday home, it is not really feasible. Why? Because of the million things involved. To begin with, you will need your own website, which is time-consuming and expensive to set up. Then, you need to identify and take steps to reach your target audience online. Which means you need mad SEO skills that you may or may not have. By the way, SEO is an umbrella term and you need to be skilled at marketing to hit the right boxes here.
You will also need to make sure that you have someone who can take care of repairs and maintenance work on your holiday investment property. It is likely that you live nowhere near your holiday home. Why, it could be in a completely different country. If that's the case then you will need someone local who can be available on hand to handle issues for people staying there - whether it is minor or major. Better be prepared than sorry. It goes without saying that you must check reviews/testimonials for the company you think of hiring, preferably someone trust-worthy.
Choosing the right location
A holiday property investment is a big one. You just cannot afford to pick the wrong location. Why? There are countless locations that seem like a smart choice but could actually be riddled with issues. Take Florida, for example of this. Perhaps you are thinking that Orlando is a great location, what with the theme parks nearby. This is true considering you will have a steady inflow of tourists who want to stay in your property.
But there is a major issue - the weather. Florida is regularly battered by storms and if you aren't careful then a nasty storm could severely damage your property. If you still want to make your holiday property investment in Florida, it is important to have support that can deal with these issues and the right insurance coverage for this type of damage from day one. If not, your holiday home dream could turn into a nasty money pit.
It is a far better idea to invest in locations that have lovely weather the year around, like Bangsar for example. When you buy a Bangsar South condo, the last thing you need to worry about is damage from flooding. The rain typically only lasts about thirty minutes per day so it is unlikely that it will cause any real damage.
Being realistic
Let's face it. You have to be realistic about what you can achieve when you invest in your holiday home. Of course, it feels wonderful to think you can get rich quick with this. While you cannot entirely rule that out, it is not the best way to hit that lofty goal. There are a lot of easier options. If you are thinking of charging high rents, forget it. You'll just turn off a lot of people who might otherwise be interested in your property.
Instead, be realistic. Your holiday home is more of an extra cushion of cash and a solid second home. Don't go assuming it is your main income source as it is unlikely to offer that kind of financial benefit. Unless you invest in a palace . . . in which case that will come with its own maintenance liabilities.
So that's the tip of the iceberg on what to bear in mind when you make a holiday property investment. It is only natural to want whatever you invest in to be successful and yield the results you expect. Laying the right foundation and making a good business plan followed by doing your due diligence will put you on the right path.
What do you think?
