Although the demand for holiday homes in South Africa lost some momentum at the start of last year, according to the FNB Holiday Town House Price Index for February 2018, a renewed year-on-year growth acceleration was demonstrated in the results of the last half of 2017.<\/p>\n
In fact, the demand for holiday homes in South Africa has remained reasonably buoyant since 2013, and many property investors purchase a holiday home as a way of diversifying their wealth portfolio and creating an alternative source of income.<\/p>\n
Or, for some, a holiday home is quite simply just that \u2014 a holiday home. A precious escape away from the hustle and bustle of city life; a safe haven where your only responsibility is not burning the tjops on the braai.<\/p>\n
Whatever your reasoning, buying a holiday home does come with its own unique set of considerations that don\u2019t always apply to other types of properties. For the sake of your finances and sanity, it\u2019s worth considering a few important factors before you make your purchase.<\/p>\n
1. Maintenance<\/strong> If you\u2019re only going to be using the home for holidays, it may well remain vacant for periods of time, so it\u2019s important that you either buy something in a good state of repair or set to work to fix any issues. Otherwise, you could be greeted by a crumbling building when you finally do get the chance to unwind, and will spend precious days of vacation time honing your DIY skills.<\/p>\n And if you do plan to let out the property while you\u2019re not using it, then bear in mind that it will need to meet tenant requirements and maintain a competitive edge in the market.<\/p>\n 2. Rental income<\/strong> Your rental income may also be influenced by public holidays, school holidays or religious festivities. It is, therefore, worth preparing in advance and planning your own use of the house around these peak periods, so that you can maximise your rental income and make up for losses whenever it is vacant.<\/p>\n If you are planning to use the property for your own leisure then it\u2019s important to communicate with a rental agent in advance when the home won\u2019t be available to let.<\/p>\n
\nAs idyllic a location may be, and as much as you may fall in love with the thatched roof of a fisherman\u2019s cottage in Paternoster or the rounded gables of a Cape Dutch house in Stellenbosch, don\u2019t forget to factor in maintenance and the costs involved, especially when it comes to older houses.<\/p>\n
\nIf you are planning to buy a holiday home to create an income stream, it is important to be aware that short-term rental earnings may be seasonal rather than steady, depending on the location. If you buy a holiday house in Camps Bay, for example, you may well enjoy full occupancy from December to April, but should be prepared for quieter winter months when the cold Atlantic waters aren\u2019t quite as appealing.<\/p>\n