“Some of your best ideas come when you’re on vacation.” – Gautam Singhania
Experts such as Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl, expected a massive summer season for Cape Town in 2022, with rates and occupancies predicted to exceed pre-Covid levels.
“Following the two-year Covid chaos, there is pent-up demand for travel from both the local and international market,” he said.
The demand for holiday homes in South Africa has remained reasonably buoyant since 2013, and many property investors purchase holiday homes to diversify their wealth portfolio and create an alternative source of income.
Or, for some, a holiday home is quite simply just that — a holiday home. A precious escape away from the hustle and bustle of city life, a haven where your only responsibility is not burning the tjops on the braai.
Whatever your reasoning, buying a holiday home comes with its unique set of considerations that don’t always apply to other types of properties. For your finances and sanity, it’s worth considering a few common factors before making your purchase.
As idyllic a location may be, and as much as you may fall in love with the thatched roof of a fisherman’s cottage in Paternoster or the rounded gables of a Cape Dutch house in Stellenbosch, don’t forget to factor in maintenance and the costs involved, especially when it comes to older structures.
- Rental income
If you plan to buy a holiday home to create an income stream, short-term rental earnings may be seasonal rather than steady, depending on the location. For example, if you buy a holiday house in Camps Bay, you could enjoy full occupancy from December to April, but be prepared for quieter winter months when the cold Atlantic waters aren’t quite as appealing.
Although the thought of hiding away from the world may appeal to you after being stuck in the office, bear in mind that a house in the middle of nowhere may attract a narrower pool of tenants or holidaymakers. The location may also affect your home’s resell value.
In the end, whether your holiday home is about taking regular breaks for your mental health, renting out for additional income or a blend of reasons, please get in touch and arrange a meeting. We can advise so that you can thrive.