If you’ve got some money to invest and you’re considering your different options, it’s likely that you’ve thought about investing in property.
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operty prices are incredibly high right now, which means that more people than ever are renting and landlords are seeing large returns on their property investments. The high prices do mean that you’ll need a fairly large initial investment but as long as you’ve got the money there, investing in property is one of the most sensible things that you can do with your money.
There are a few different options when it comes to property investing but most people tend to go for buy to let. You’ll have a regular income as long as you have tenants in the property and that will cover the mortgage plus a bit extra. If you’re looking for an investment with a faster turnaround, you could look into buying a property to renovate and sell on, but this is often a riskier strategy. Finally, you could buy a holiday home either in this country or abroad somewhere, and rent it out for shorter periods.
The most obvious benefit of a holiday home is that you can use it yourself and you can usually charge a higher rent than you would with a residential property. However, there is a big downside because you’re not guaranteed to fill it every single week of the year and that means that people sometimes struggle to see a good return on their investment. That doesn’t mean that you shouldn’t buy a holiday home because they can be a great investment choice, just make sure that you remember these simple tips to help maximise your profits.
Choose An Up And Coming Location
When you’re buying any property, location is always one of the most important things and buying a holiday home is no exception. In fact, finding the right location is probably the most important thing because if you choose a place where nobody wants to go on holiday, it doesn’t matter how amazing the property is, you’re not going to rent it out. The obvious thing to do is to buy a property in a popular tourist destination because you can easily find people to stay there. The only problem with that is, the price of the property is going to be incredibly high, which means that you might not make a huge amount of profit. So, how are you supposed to find a cheap property in a great location?
The answer is to find an up and coming location that is likely to be popular and attract more tourists in a few years time. That way, you can get a good price and the value of the property is likely to appreciate significantly. You might not see much of a return for the first few years, but after that, you should do, as long as you pick the right location. It’s difficult to identify the areas that will become popular, but you should keep an eye on property developers like HH Properties and Peter Hall who focus on regenerating areas that don’t get much use and turning them into holiday homes. These kinds of new developments are what you should be looking for. It’s also a good idea to speak with estate agents because they will have a better idea of which areas of a city are becoming more popular.
Pick The Right Bookings Agency
If you don’t mind a more hands on investment, you can handle your own bookings through a site like Airbnb, but if you don’t want to put that much time into it, you’ll need to find a bookings agency to deal with that for you. Choosing the right agency to work with is very important and a lot of people don’t choose very wisely. The percentage cut that they take needs to be considered, but don’t just go for the cheapest agency you can find. There’s probably a reason that they’re so cheap and they aren’t likely to get you very many bookings, which means you’re not really increasing your profits by taking advantage of a cheaper agency. It’s a lot better to pay a little more for an agency that can fill the property for you.
Keep Prices Competitive
Pricing is important because there is a lot of competition out there and if your prices are too high, you’re never going to find anybody to stay in your holiday home. Make sure to consider the standard of the property and don’t price too low if you’re renting out a luxury apartment, but also check the prices of similar properties and make sure that you’re not overcharging people.
If you follow these basic tips, you should be able to maximise the profits that you get from your holiday home investment.
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