1. Location, Location, Location
South Africans are spoilt for choice when it comes to deciding upon a location for their holiday house. What is even more is that the “stock” currently available includes a range of properties in different destinations and price brackets. Location however remains important and buyers should research the property appreciation the area has achieved over the past year, how well maintained the area and its facilities are and establish the general market conditions prevailing in the particular suburb.
2. Looking Ahead
Property is a long-term investment and buyers should consider future developments and infrastructure planned for the suburb, as well as zoning and transport routes that may affect the tranquillity of the area should be borne in mind.
3. The Piggy-bank
There is no point in investing in a holiday home that is going to put extra strain on your personal finances. Holiday home buyers need to consider their financial position, with special regard to the initial out lay of capital such as a deposit, transfer fees and conveyancing fees, as well as the impact of possible interest rate increases and the rates, taxes and utility tariffs in the area.
4. Long Distance Relationship
There are obvious practical issues involved when the property is situated in a different town. Buyers need to consider the maintenance, security and insurance of the property, all of which need to be added into the overall budget.
5. Use it or lose it
Although buyers purchase holiday homes zealously and with great excitement, there is no point in owning a holiday home that will seldom or never be used. Carefully consider how much the property will be used and enjoyed in the years to come and establish whether or not the purchase will be worthwhile.
Holiday homes are still considered to be a strong asset class in which to invest. However, the property investment landscape has changed and with any property purchase, a good investment decision can only be assured if a buyer has done all his homework and is sure that the investment they are making is worth the financial commitment they are laying down to acquire it.