All Topics / Help Needed! / Holiday let

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of adzleaadzlea
    Participant
    @adzlea
    Join Date: 2012
    Post Count: 15
    February 5, 2012 - 9:19 pm

    Hi

     I am thinking of buying a 2 br unit in Mackay / Airlie Beach to use as a holiday let rental to use ourselves once or twice a month and then rent out when not there. I am tending to lean towards Mackay as I think capital growth would be better long term. (Looking to hold min of 8 yrs)

    There are a couple of options ranging from a 2 br self contained unit in a holiday complex from $200k or a new 2 br unit in CBD overlooking river opposite shopping centre for $600k with a mix of owner occupiers and rentals.

    Does anyone have holiday rentals and can give me some tips?
    What LVR will the banks go up to? Would it be the same as if you were going to rent it out full time?

    How do you go with insurance?

    Any advice or opinions would be appreciated, there  doesnt seem to be many people doing this, is this because of the irregular rent received?

    Would you do it?  Why? Why not?

    Thanks

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 7, 2012 - 1:28 pm

    Hi adzlea

    I will answer from a Finance perspective and let others with more in depth knowledge on the area than me comment on the potential growth.

    It is a tricky one from a lenders perspective and will to a certain extent depend on the individual lender.

    Assuming that the security is a standard residential property and not part of a managed complex, pooled investment or similar you may get some lenders apply standard lvr to the deal.

    Others will work on between 50-70% of the potential rent and some will not allow any meaning you need to show sufficient evidence of serviceability from your external earnings.

    Sorry to be so vague but there are a few variables and without further hard data it is difficult to give you an exact answer.

    Cheers

    Yours in Finance 

    Richard Taylor | Australia's leading private lender

    Profile photo of adzleaadzlea
    Participant
    @adzlea
    Join Date: 2012
    Post Count: 15
    February 7, 2012 - 9:11 pm

    Thanks Richard,

    I have been looking at options and looking further into figures I don't think it is a good option.

    Thanks for your reply

    Profile photo of david4000david4000
    Member
    @david4000
    Join Date: 2011
    Post Count: 21
    February 7, 2012 - 11:16 pm

    I'm actually looking into a similar idea – buying a vacant block of land in a beach suburb with a view to have a transportable home on the land in a 1 to 2 year time-frame.

    I'm guessing from an investment /financial perspective it's not really a smart decision but from a lifestyle point of view I don't think you can go wrong!

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    February 8, 2012 - 8:46 am

    Not a fan of holiday lets – it seems people who buy holiday lets, in general, haven't managed to apply an analytical approach to their investing. They are confusing life style and investing.

    Holiday letting does throw some interesting tax issues into the mixer too.

    For me – invest where the compass takes you and then holiday in your preferred location. Keep the two matters separate.

Viewing 5 posts - 1 through 5 (of 5 total)

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