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Pros and Cons of Investing in Holiday Homes

Investing in holiday homes can be a successful property investment strategy and have the dual benefit of providing you a lifestyle investment, too, if you use the property yourself.So here is a list of the pros and cons that you need to consider before taking the plunge and pursuing this strategy.

What is the holiday home property investment strategy?

How investing in holiday rental property works

Benefits of holiday lets

  • An opportunity to do business out of your asset.
  • Generally higher yields vs. traditional renting.
  • Better depreciation due to the additional furnishings.
  • You can get access to it yourself in most circumstances.
  • Great way to purchase a future family holiday home.
  • It could be a retirement plan.

Negatives of holiday lets

  • Involves a lot of management. This will cost you money and/or time.
  • Your tenants are there for ‘a good time’, ‘all of the time.’
  • Generally, the properties will be an extended drive/flight from where you live, so harder to check, monitor, and/or manage directly.
  • More stuff to manage; cleaning, gardening, furniture, bonds, and keys.
  • If you get it wrong, you may have a property that takes up your time, doesn’t grow in value, and is negative cash flow.

Rules for identifying locations for best returns

  • Stay within 2 hours of a CBD.
  • Target areas with year-round attractions and activities.
  • Target areas where people are likely to stay for up to a week in peak or on weekends in off-peak.
  • Make sure your location has a pub, a café, a bakery, and a community playground at minimum.
  • Get as close to the local attractions and main street as possible for both tenancy and security reasons.

Real Estate Investar members can use Investar Search, its intuitive keyword function, plus other appropriate filters to target holiday homes that fit their buying criteria.

The buying process


Effie F. Bush is a 27-year-old junior manager who enjoys praying, social card games, and listening to music. She is inspiring and brave, but can also be very disloyal and a bit unfriendly.She is an Australian Christian who defines herself as straight. She has a post-graduate degree in business studies.

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