Owning a beach shack or a bush getaway has always been one of the great Aussie dreams. It’s a lifestyle luxury for a number of lucky Australians, but it can also be a smart investment.
Whether it’s a seaside getaway, a rustic rural village house, a hobby farm or a hut in the mountains, the idea of a holiday house is tempting for many of us.
Decide what you can afford then choose a location where you’d like to invest. Often there are emotional factors – it’s where you holidayed with your parents – or you’ve fallen in love with a character filled house in a country hamlet. But you need to be realistic with your choice if you don’t want to lose money.
Even if you buy your holiday house for family and recreational reasons, you can combine your use of it with renting it out and hopefully seeing a gain in value over the medium to long term.
If you’re banking on rental returns, consider the following:
Holiday rentals can be extremely lucrative if you buy in a popular holiday spot. If you plan on a financial as well as a holiday investment return, make sure you do your homework before you buy.
|Capital growth investment|
If you choose your location carefully when purchasing your holiday home, you’ve a good chance that your property will increase in value. Capital growth is generally strongest in towns with year-round tourist appeal and a well-established economic base. Quality lifestyle amenities like cafes, restaurants and bars are important, as are things like health services and transport. Unique or character properties will often have good capital gains, but there is more of a risk with a quirky property – it won’t be everyone’s cup of tea.
Also look for an area with a booming industry, along with the tourist trade.
It’s wise to spend some time in the location you’re considering, and do your research about the area both now and in the future. For example, are there any major developments planned, and will they impact on your investment by affecting the supply of properties for sale or rent. It also helps to get a ‘feel’ for a place and make sure it’s right for you, as you’ll be spending a lot of time and money there.
|How we can help|
Buying a holiday home either as an investment or a lifestyle option is exciting. We can help with more than just the finances.
How much can I borrow? the easy to use calculator which gives you an indication of your borrowing capacity.
Calculate my repayments: find out how much your home loan could cost you with an estimate of the monthly repayments.
An A-Z Review® with an ANZ Personal Banker: if you’re looking to buy a holiday home our Personal Bankers could help you:
ANZ Home and Investment Loans: an ANZ Home Loan specialist can help you explore your options and find the right solution to suit your needs. And remember, ANZ is Australia’s most awarded home lender2. Contact us today.
An ANZ Financial Planner can help you determine if buying a holiday home is the right strategy from a financial point of view.
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2. Money magazine Home Lender of the Year Award 2010, 2008, 2007, 2006 and 2005, and AFR Smart Investor Magazine Home Lender of the Year Award 2005, 2004, 2002, 2001, 2000 and 1999. Australian Lending Awards, Mortgage Lender of the Year 2011 and Best Investor Lender 2011. The Australian Lending Awards is an independent initiative of The Adviser and specialist research and advisory firm RFI.
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