There is no doubt that there are many compelling advantages to investing in a holiday home. However, before you retire your backpack and choose to commit to a single location, it is vital that you carefully weigh the pros and cons. Luckily, you can get some insightful help on this topic below.
Pro – Lower holiday accommodation costs
First on the list of advantages is that by investing in a vacation property you can save a packet on accommodation costs. Indeed, once you own a holiday home you will no longer have to factor hotel, resort, or campsite costs into your vacation accounting.
Additionally, unlike other forms of accommodation when you own the property you get to decide how long to stay. You can even lend or lease it out to friends and family too, which means you could save your entire circle money.
Con – You still have to pay for everything else on your holiday
However, it is also worth recognizing that while owning your own holiday property can significantly reduce your accommodation costs, you will still need to pay for flights, food, and entertainment. Indeed, with many types of vacation, the accommodation is actually the lowest cost comparatively, therefore you must run the numbers before you commit.
Pro – Make money long term
Another of the appeals of investing in a holiday property is that they have the potential to make you money in the long run. Indeed, this isn’t only about saving you money in the vacations you take, but also being able to sell on your asset for a greater sum than when you bought it. Not to mention the income that it can generate when you lease it out.
Con – Holiday lets aren’t filled all year round
Of course, it is worth noting that holidays don’t quite work in the same way as regular lease properties do. This is because they will always be in the most demand at peak times such as summer or the ski season. However, outside of this time, you may find it hard to find someone willing to rent your property. The good news is that many holiday-let owners don’t see this as a problem, because they can offset any loss against the much higher prices than they can charge during peak season.
Pro – Get to get a feel for what life is really like in your given location
Another major benefit of investing in a vacation home is that there is the potential to get a much more authentic experience of the location in which you are staying. Indeed, instead of visiting a separate resort, you are much more likely to be integrated into the life of the locals, and visiting the same spot again year after year will help you make genuine connections and be involved in the local community in a much more meaningful way.
Con – You will need to deal with local laws and regulations
On the flip side of this, there are some disadvantages that you will also need to consider. The first of these is that you may get bored visiting the same area over and over. Indeed, the appeal of travel for many is seeing as much of the world as possible, something you will not be doing if you have a vacation home in a set location.
Additionally, by owning a home in a specific area you will be governed by the local laws and regulations, especially when it comes to property. For Example in Singapore, homeowners must understand how things like the sibor rate impacts getting a loan for a property before they begin the investment process. Otherwise, they could end up in a position where they have used up significant resources like time, only to be thwarted in their attempt to purchase a vacation home.
Pro – No fighting for sun loungers
While some of us have made close friends on vacation others prefer privacy, and not having to jostle with other guests to get the best sun loungers, equipment, and bar snacks. Indeed, for those looking for privacy and quiet buying your own vacation property can be exactly the right choice.
Con – You have to do the upkeep yourself
Although, such privacy comes at a price and it is usually having to manage the property yourself, which means cleaning, repairing, and gardening tasks need to be completed while you are on holiday, or you need to pay a management agency to do these for you, something that can impact any profits you make.