Any stories of Holiday Homes that have turned out well as an investment?

Discussion in 'Airbnb & Short Term Letting' started by chindonly, 13th Jul, 2015.

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  1. chindonly

    chindonly Well-Known Member

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    Seeking some real life stories of people who have purchased holiday homes / units in mainstream tourism areas and have done well with some CG growth, not too much expense for holding costs and have some private use for lifestyle as well.

    Most of the stories I have seen have not worked out well - but there must be some good ones out there somewhere!
     
  2. Fargo

    Fargo Well-Known Member

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    Bought a house at Clarke Philippines after 10,000 USA air force workers departed after Mt Pinatubo eruption for $5000 in 1992, 10 years later it was worth 250k, don't know what it is worth now the land was worth 300 peso/sqm when purchased probably worth about P20,000/sqm now, it was thought prices were ridiculous when they got to P1000/sqm
     
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  3. chindonly

    chindonly Well-Known Member

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    Thanks Fargo. Bit of an unusual situation with the eruption.

    Was hoping for some Australian examples - Gold Coast, Sunshine Coast etc.
     
  4. chindonly

    chindonly Well-Known Member

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    So - noone here has holiday homes, or they just haven't been good investments for anyone???
     
  5. Natedog

    Natedog Well-Known Member

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    I bought a house on the Mornington peninsula to be used as a future holiday home, but it's a full time rental currently. I paid $435k for it in 2012 when no one was buying anything. It's council rates val was $595k!
    I used the rates notice to refinance with a lender who accepted the rates notice as the val literally 4 months later.
    This alowed us to pull all the deposit we put into it out and went and bought another IP.
    It was the best instant equity release we have done!
    So not technically a holiday home story....but it's in a holiday area.
     
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  6. Azazel

    Azazel Well-Known Member

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    We were looking at a holiday rental in Sanctuary Point near Jervis Bay. As a holiday rental it only would have gotten about $7,000 more rent per year than as a normal rental. Decided the hassle with cleaning/maintenance wouldn't be worth it.
    That was a 2 story dual occupancy too, would have been good to be able to rent out both or only 1 when you want to stay there. But double the things to go wrong, maintenance etc...
     
  7. johnmteliza

    johnmteliza Well-Known Member

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    The Mornington Peninsula is the most popular holiday destination in Melbourne. It has also become the 2nd highest performing market in all of Australia within 2017/18. It really shows that holiday purchases can be a really good investment. This sudden growth has also only hit within the past year or so and is set to continue in 2019. Even Phillip Island and the Bellarine Peninsula have select suburbs performing well. This further proves that holiday houses are hot property lately.
     
  8. jodes

    jodes Well-Known Member

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    It's still early days but we purchased a holiday property in June of this year in the NSW Southern Highlands - obviously no growth just yet but i'm confident we bought at a good price.
    The plan was to go down there every weekend (to enjoy) and rent it out during weekdays. Everyone said we would never get anyone for weekdays so we were dreaming.
    3 months later and we have bookings most weekdays and have decided going down there every weekend is too hectic- so we tend to go down every 2nd/ 3rd weekend instead meaning we can get the higher weekend rates for bookings. Even with us using it, I'd say we are currently about $1500- $2000 p/m cashflow positive.
     
  9. chindonly

    chindonly Well-Known Member

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    Nice. So are you air bnb-ing it, or private bookings?
     
  10. TAJ

    TAJ Well-Known Member

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    Purchased land at Wonga Beach FNQ ( north of Port Douglas) in 2002 and had a home built on it in the same year. Initial intention was to spend 6 months there each year ( May - November) then to head back home to Yamba for summer.
    Unfortunately my wife fell ill and the plan never became reality. I have had 2 lots of tenants in the house since 2003. Very lucky!
    This has been my last investment property purchase. Will own it outright early next year all going well.
    It will be kept as part of my passive (relatively) income in my retirement.
     
  11. jodes

    jodes Well-Known Member

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    Airbnb-ing. We have another couple of airbnb properties already (not in "holiday" locations) which definitely makes it easier.
     
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  12. Casteller

    Casteller Well-Known Member

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    Mine was a complete lemon, but it is in Spain. Will sell for around 100K loss total (Euro), and will never buy another holiday home, only rent. My places in Australia have more than made up for it though, especially my house in Byron Bay which is rented out perm though so technically not a holiday house though in an area full of them.
     
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  13. TAJ

    TAJ Well-Known Member

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    How long have you had the place in Byron? If over 10 years you will see massive growth. Was a paradise years ago, not so much today unfortunately. Anything close to the water commands top dollar.
     
  14. Casteller

    Casteller Well-Known Member

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    That place 5 years, its close to the water, but I had another before that. Actually 5 years ago was cheaper than 10 years ago, there was a dip then. My mothers house has gone up about 15,000% (20K to 3M) in 50 years.

    Byron is still a paradise to me, it is not hard to escape the crowds most of the year.
     
  15. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    I have seen some areas experience massive growth ie Byron, FNQ regions and yet others have tanked.

    Prime real estate should always out perform a dog. Just because its near a beach doesnt mean it has to appreciated in value. Many coastal areas have been smacked with downturn in nearby mining communities, cyclone damage and general tourism shifts.

    Two clients each bought in Palm Beach. One has gone well and other struggles for value and also rent in the warmer season but each gets great demand from overseas and Victorians etc even in winter. The good performer costs a LOT more and has great views. The other doesnt. They are spending a bit on reno's and new well styled furnishings since tourists demand a bit when they pay a high weekly rate.
     
  16. Illusivedreams

    Illusivedreams Well-Known Member

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    Can you put some more numbers in?
    I want to see if we can make something like this work,

    Purchase price and daily rent? Also who manages and cleans property?

    Cheers
     
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  17. Reddy

    Reddy Active Member

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    Wondering Is it going well for you ?
     
  18. jodes

    jodes Well-Known Member

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    @Illusivedreams and @Reddy (sorry for my delay especially my one year delay for your question, lllusive
    Still going really well- from a monetary perspective. We don't go down there very often though as it's always "we can go down there or pocket $800-$1000 for this weekend" and usually choose to pocket the cash :) So it's not the holiday house we envisaged! We probably go down about once every 2-3 months now. We have a fabulous cleaner. Cleaning is expensive in the Southern Highlands but our cleaner is amazing so it's worth it!
    Rough numbers as follows (monthly) :
    Mortgage: $2000
    Utilities, rates, milk, bread etc: $1000- $1500 (more in winter)
    Average earnings: $5000-$8000 + a month (the $8000 is in the holiday months, say over Christmas holidays)
    So can be a nice little earner for us. We manage it from Sydney and would probably spend about an hour a week managing it (responding to questions, scheduling cleans etc).
     
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  19. jodes

    jodes Well-Known Member

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    On a related topic, my husband and I were actually talking the other day about returns for holiday destinations vs cities. We have another Airbnb in St Kilda which is an apartment. The house in the SH and the apartment in St Kilda essentially cost approximately the same amount (purchase price). But becase you get so much more for your money in the SH (eg a 4 bedroom house with multiple living areas vs a 2 bedroom apartment), your earning capacity is much greater.