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Holiday leasing

Discussion in 'Property Management' started by JesseT, 1st Jul, 2015.

  1. JesseT

    JesseT Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    80
    Location:
    Sydney
    Just wanted to ask if anybody here leases out a holiday house and what their experiences were.
    I realize its not the greatest strategy and many advise against it but under particular circumstances I imagine it could work quite well.

    We plan to one day own a hobby farm within 2 hours of Sydney, circa 1.5m, which my partner will manage as a holiday/health retreat, with a small premises on the farm which we live.

    I am planning on buying it in the next 5 years and considering holiday leasing it to begin with and slowly building it up to a functioning business over time prior to moving there.

    Would be great to hear of anybody elses experiences in doing something like this or any advice/reading material, I am acquiring a few medium term capital growth investment properties in the mean time which I hope to one day use as leverage to purchase it, but the long term planning is definitely still in the beginning stages.
     
  2. Ausprop

    Ausprop Member

    Joined:
    19th Jun, 2015
    Posts:
    23
    Location:
    Perth
    Am well versed in this. Who told you it is not a great strategy? IMO skip the bit where you bog yourself down with "cap growth" dross (also known as 'cash black holes') - go for both cap growth and cashflow... commercial or well located holiday homes that yield 12 - 20%.
     
  3. JesseT

    JesseT Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    80
    Location:
    Sydney
    I don't have the borrowing capacity for the farm yet, I will need roughly 300k in deposit and a 200k pa joint income. So currently I need my strategy to provide 250k equity and another 40k income, I was planning to increase income outside of property investing but it would be a great bonus.

    Do you think I would be more successful using holiday properties as a vehicle to get to this goal?
    I would not have expected to safely invest in any holiday homes for capital growth.
    My last 2 purchases have been in Logan and provide a slightly positive cash flow.
     
    Last edited: 2nd Jul, 2015
  4. jpcashflow

    jpcashflow Well-Known Member Business Member

    Joined:
    21st Jun, 2015
    Posts:
    371
    Location:
    Melbourne
    Hello holidays home are interesting but something I would not be touching.
    With the generational change occurring more and more people travel overseas.

    Also what will do with the property in quiet holiday times? There is a suburb called Daylesford in Melbourne 5 years ago it was the "place to be" go to the area now and there are so many homes for sale its not funny. I think people get more bored quickly as well.

    For me keep it simple and stick to what you know.
     
  5. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,579
    Location:
    Australia
    With holiday leasing you need to be onsite or have a great PM that arranges lettings, cleaners, gardeners etc.
     
  6. Ausprop

    Ausprop Member

    Joined:
    19th Jun, 2015
    Posts:
    23
    Location:
    Perth
    I have noticed a great increase in people holidaying at home - terrorism and the declining dollar assisting.
    it's good to select holiday home locations that are not just summer or winter locations but are varied enough to have all year income