If you have a small nest egg saved that you would like to grow, consider purchasing a holiday home as property investments still remain a solid long-term investment says Adrian Goslett, CEO of RE/MAX of Southern Africa.While investors may not be interested in the headaches involved in being a full-time landlord, other options exist. “Why not invest in a holiday home and rent it out to holiday makers,” asks Goslett. He notes that holiday homes remain a great long-term investment that can earn great income over peak holiday periods. “There has never been a better time to invest in property – there are some real bargains to be found out there. However, perhaps the most enticing aspect of investing in a holiday home is that it will offer you a place of your own, by the seaside, in the mountains or the country, which you can use as your own private getaway.”Goslett provides the following reasons why now is the best time to invest in a second property:1.) There is an oversupply of real estate stock on the market: The slowdown in the economy and the property market offers potential home buyers a big advantage – most holiday property markets are full of buying opportunities, which offer those in the market great scope for choice and bargaining.2.) Affordable prices: House prices are at a five- to 10-year low, and many industry experts have estimated that they are not going to get much lower before the market enjoys an upswing.3.) Interest rates are low: Sitting at 9%, the prime lending rate is currently lower than it has been since the ‘70s. With lower interest rates, home loans become much more affordable and those applying for mortgages can qualify for considerably more. The bottom line is you should take advantage while these favourable conditions last.4.) Access to the best of the best in the industry: The professionalism and general competency of South African estate agents has been noticeably improved because of the enforcement of more comprehensive compulsory professional qualifications. The enforcement of these qualifications, combined with the fact that many agents have left the industry in droves due to the economic downturn, means that those agents left standing are at the top of their game – the best of the best.5.) Increased rental demand for holiday homes: Market demand for holiday homes has increased as more and more holiday makers choose to save money by renting out a holiday home instead of staying in expensive hotels and B&Bs.6.) Enough time to prepare for the next holiday season: Lastly, buying a holiday home now would give you enough time to fix it up in time for 2011’s peak holiday periods when most of any holiday home’s rental income is made. Even the loveliest holiday home will need certain things done to it to maximise its rental earning potential – rooms might need repainting, security might need to be tightened, the garden might need landscaping, the flooring might need to be redone, or the wooden windows and doors might need to be sanded down and retreated, and so on. Buying now will give you time to finalise the purchase of the home, make the subtle changes and market it to potential holiday makers.Comments Goslett: “Although the leisure property market is still showing stunted growth, all the various aspects have lined up to make this the ideal time to choose to invest in one. Leisure properties always tend to lag at least 18 months behind the trends of the general property market, and we expect to see a shift towards increased sales volumes and capital growth towards the end of 2011 – so get in now while the timing and prices are right!”
Property Advice
