Being in a more relaxed environment is something we all want to achieve. Maybe this is why a lot of investors think that investing on property and making it a holiday home is actually a smart move. Sort of like, hitting two birds with one stone. But many experts say that this could only lead to disappointment financially speaking. There are reasons for this and here are some things you may want to consider.

Summertime is the most popular time to have some time off. Who doesn’t want to have their own getaway place? Somewhere near the beach – away from the busy streets, noisy cars and just have that amazing experience of appreciating nature and passing time without thinking of the work you have to do the next day. Being in a more relaxed environment is something we all want to achieve. Maybe this is why a lot of investors think that investing on property and making it a holiday home is actually a smart move. Sort of like, hitting two birds with one stone. But many experts say that this could only lead to disappointment financially speaking. There are reasons for this and here are some things you may want to consider.

Owning a holiday property is not cheap. To maintain the beauty of the house, you will need to spend money on making improvements, adding furnishings, customizing rooms, etc. while you are not making any profit from it. Unless your savings really don’t mind any of this, you will need to make sacrifices in order to not lose too much funds. It would actually make more sense to save up for a yearly holiday getaway than to purchase a holiday house where you will need to spend money on regularly.

Another downside of getting a holiday home, apart from reduction of your savings is the risk of decreasing your borrowing capacity. Because of this, any plans of investing in property or let’s say, upgrading your family home could be affected. If you want to ensure more money when you retire, the smarter way is to go invest in a property that has way higher capital growth.

There’s also this matter about long-term costs when you purchase a holiday house. These properties are often located in areas where the population is temporary and the demand can be unpredictable because these homes are normally outside the cities. There is limited capital growth when the property is located in areas where it is not as attractive to consumers.

Lastly, one of the reasons why this is not a great idea is that there’s just a lot of commitment involved and unfortunately, it’s not worth all of it. Because it’s a holiday home, you most likely won’t be there half the time and there’s going to be a lot of work needed. So, the next time you think of investing in holiday house, you should probably have to think very carefully.


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