Real Estate Investor Magazine South Africa Dec/January 2020 | Page 35

Occupancy rate from different
accommodation types:
68%
36.4%
40.1%
Other accommodation
Caravan parks and camping sites
Guest houses and guest farms
52.1%
Hotels
53.8%
Total industry
long-term – provided buyers have done their homework
beforehand. Goslett has shared his top three tips to ensure a
good return on investment regarding holiday homes:
1. Long-term price appreciation
Goslett explains that it’s useful to research the area and
understand the level of appreciation it has achieved over the
last few years before committing to any property purchase.
Study the area and how it’s been maintained with regards
to the surrounding facilities, as well as any plans for future
development.
Some developments will add to value of the area, while others
may detract the appeal and lower property prices in the suburb.
Any infrastructural plans, such as malls could increase the value
of a property, but it all depends on how these development
affect traffic and tranquillity.
2. Rental Income vs. Expense
Your most lucrative times will be during the holiday seasons,
which is most likely the time you’d like to use it. Before
purchasing a holiday property, first establish whether the cost
of maintaining it will be worth your while if you’re only able
to rent it out for a short while in a year. Maintenance, security,
utility and insurance tariffs are all factors to consider regarding
your costs and should be calculated against your income to
work out your return.
3. Managing the property
While owning a holiday-type property can be all well and
good, there is maintenance that will need to be attended to
throughout the year. It may be worth your while to have a
property management agency taking care of the property
to fulfil these tasks for you. They’ll conduct regular check-ups
and inspections, as well as place reliable tenants. While you
will incur additional fees, it will also help reduce the number
of vacant periods and costly repairs that could occur as a result
from the house standing empty.
Goslett’s final piece of advice is to conduct thorough research
to determine whether the returns will be worth the investment.
“Always do your homework to ensure that the investment you
are making is worth the long-term financial commitment.”
SOURCE RE-MAX, www.southafricanmi.com
SA Real Estate Investor Magazine DECEMBER/JANUARY 2020
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