Are vacation homes good for investment?
You have just planned to spend your vacations with your loved ones this summer, away from the hustle and bustle of the city. Once you arrive at the desired place, you are shocked to accept the reality that you will have to spend hours to find a perfect hotel room rather than relaxing from your tiresome journey. In such a situation, everyone would wish for is own house.
Buying an own holiday home is perhaps a tempting idea and especially when you are frequently holidaying in a year. While one would think of buying a vacation home, he/she should also consider that how useful would it be to invest in a holiday home.
There are various things which one should consider before buying a vacation home such as; will it be a good investment option? Should it be used just for the personal use or for income generating purpose? And so on.
Here are some tips to keep in mind:
Get earnings from your holiday home:
If you own a holiday home and are not aware about getting returns on it, you can always give your vacation home for rent. A house in the tourist spot will help you make good earnings during the peak season which lasts up to 12-15 weeks in a year. In case if you have invested in the holiday home purely for income, you might find it difficult to find tenants for the entire year. Most cities in India yield higher holiday returns.
Conduct a study on the area:
In order to get the best holiday home or get better returns, you should do a complete study on the prospective growth of the destination. Cities which are a year round tourist destination will fetch a greater return with a higher capital growth and a well economic base. Apart from just attracting the tourist for tourist causes, the city can also get good returns if it is a centre for meetings, incentives, conventions and exhibitions. These factors make it easier for the sale of the property and will also create a demand for property in this area. Ensure that you buy a holiday home closer to the places like a beach, a tourist spot or a business centre.
Impact of other factors:
Apart from just the above factors, you should also consider factors like capital appreciation, market dynamics of the location, construction of other properties, accessibility to that region etc. All of these factors play a major role in getting high returns.
Decide the purpose of investment in a holiday home:
It is very important that a person should decide the reasons for buying a holiday home. Usually vacation homes are brought as lifestyle choices. In case a person wants to buy a vacation home for investment purpose, it is advisable that he buys a home which is inside a city rather than in a rural part.
Maintaining a property:
Maintaining a holiday home is quite an expensive job as it remains in a pristine condition most of the time. Even if it is been given for rent, people might not stay in the home throughout the year. Constant upgradation of the furniture and appliances are required for the usage of the holiday home.
