https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode #66 of the Property Planner, Buyer and Professor Podcast, the team discuss "Holiday homes - delirium or dream?", as Dave, Cate and Pete take you through: 1. Lifestyle, investment or hybrid - what is a holiday house? The trio share whether you should be looking at your holiday home as a lifestyle property, a money-maker or a mix between the two. They shed light on the compromises involved when opting for the hybrid scenario, and the key considerations that investors need to acknowledge if they want to purchase with eyes wide open. 2. The opportunity cost of holiday homes Holiday homes are typically in locations that do not exhibit long-term outperformance in capital growth and your use of the home will limit the rent you receive and the tax advantages. Compounding this, your borrowing capacity will be significantly reduced, limiting your investment opportunities for wealth creation. Considering how your retirement goals will be impacted if you purchase a holiday home instead of a pure investment is critical to ensure you make the right decision for your today, and your tomorrow. 3. The tax implications and limitations for holiday homes The trio explain the tax implications of leasing out your holiday home, whether it be a long-term, traditional residential lease, a short stay Airbnb arrangement or an ad hoc approach. 4. The perils of purchasing a holiday house with friends or family Purchasing a holiday house with your mates or siblings may seem like a great idea at the time, but the reality of managing the property can be the cause of strains on the relationship. In addition to a usage roster and the clean-up and provisions protocols, co-owners also need to consider how joint ownership arrangements can change and evolve. The trio talk about the importance of an out-clause and rules around equity access before signing on the dotted line. 5. Maximising rents on a holiday home There are differing management fees and service costs that must be factored in, depending on whether your property will be leased 'hotel style' like an Airbnb or for longer-term stays. From appointing cleaners to sourcing breakfast provisions, to linen changing and beyond, the trio discuss the various ways that holiday house investors can maximise their profits over a holiday period. 6. When should you buy a holiday home Although cash flow, long-term investment and ongoing maintenance are critical factors to consider, the memories and traditions that you'll create with family are priceless, as is the respite from the day-to-day grind of a professional career or running a family. So, when is a good time to consider purchasing a holiday home, and how do you create a cost-benefit analysis when some measurements are non-financial? 7. What's in store for 2021? 2020 has seen some holiday locations take capital growth by storm. But will the tree and sea change trend continue or has the capital growth boat for holiday locations already sailed? The trio reveal their predictions for 2021. Visit the show notes - https://propertyplanning.com.au/holiday-houses-delirium-or-dream/
