It Is boom time, but life is not a beach for Vacation home owners

John Collis, a Sydney based investor, that has bought a number of apartments on the Gold Coast due to the excellent rental yields. Picture: NIGEL HALLETT

INVESTORS who have holiday houses in Queensland are more prone to reap the financial benefits this summer with new figures revealing strong demand for the prized beach shack.

Lured by the promise of capital profits and a constant revenue flow through the share economy, agents are now seeing an increase in investors seeking to the shore as occupancy rates increase during the peak period — and sellers will also be seeking to profit on the increase in inquiries.

LJ Hooker holiday supervisors in Currumbin on the Gold Coast reported an occupancy rate of 98 per cent on the Christmas/New Year peak, together with nine out of 10 bookings coming from domestic travelers.

“We have 85 per cent of our holiday rentals reserved for the next Christmas and New Year season,” LJ Hooker Currumbin principal Alex Passos stated.

It is better only south of the boundary from Byron Bay and Kingscliff, at which 100 per cent of homes and apartments the group manages are rented for the holiday break.

“Depending on where you reside in Brisbane, you can be at Kingscliff inside one hour, which explains why it’s such a favorite option for purchasing a holiday investment,” according to LJ Hooker Kingscliff principal Paul McMahon.

“For many holiday home purchasers, it’s a significant investment.

“They need to reevaluate the returns around the Easter and Christmas period, once you’re able to make half your yearly income, so that they avoid staying there at those peak intervals, and rather opt to go to and enjoy their investments out of those intervals.

“Averaged over a year, we aim for 65 per cent occupancy.”

December and January are busy times of the year for holiday home buyers. Picture: iStock.

December and January are often active times of the year for holiday home buyers that unite their annual leave with procuring a new property.

Based on LJ Hooker study, affordability is your major priority when it comes to picking a holiday rental.

But holiday houses may bring headaches like ongoing maintenance and cleaning expenses, management fees and the volatility that accompanies investing in coastal economies.

Real Estate Buyers Agents Association of Australia QLD representative Zoran Solano cautioned buyers not to get caught up in the holiday hype.

“It is definitely a phenomenon we see affecting the marketplace while individuals are on holiday,” Mr Solano stated.

“Try and maintain that enthusiasm, but perhaps not take action at that time of season — head back in winter.”

Surfers Paradise on the Gold Coast is a favorite holiday destination. Picture: Mike Batterham.

Mr Solano, who’s a buyer’s agent with Hot Property Buyers Agency, said coastal land markets were famously volatile.

“Although we are seeing a great deal of positivity round the Gold and Sunshine Coast markets, historically people niches do ebb and flow a good deal more than capital community economies,” he said.

“I do still think particular investments in those coastal regions are insecure and higher risk.”

Mr Solano said beachside houses frequently required more care and there was a risk of other holiday makers’ bookings Running hopes of a spontaneous weekend away for the house’s owners.

But when your heart is set on a holiday home from the water, he counsels buying a home in a complex with plenty of amenities and which can generate a consistent rental yield.

Mr Solano suggested looking in regions that had a life outside of tourism, for example Main Beach and Broadbeach on the Gold Coast, and Noosa on the Sunshine Coast.

“We are seeing a great deal of activity in Broadbeach and watching a tiny decrease in the appeal of Surfers Paradise,” he said.

“About the Sunny Coast, you can not go beyond Noosa. It is a place where we’re seeing a great deal of opportunity.

“It is someplace that is consistently top of mind to global visitors and globally has a profile as well.”

Kollosche Prestige Agents managing director Jordan Williams stated the holiday letting company on the Gold Coast was going gangbusters.

Mr Williams said demand for rentals from high profile, high net-worth people was particularly strong, prompting he along with his business partner to prepare a boutique holiday rental division this season for exclusive, high-end houses and apartments.

Jordan Williams of Kollosche Prestige Agents in Surfers Paradise. Picture: Mike Batterham.

“We have people calling us willing to pay $50,000 a week for some residences,” Mr Williams said.

“We find a lot of our high net-worth clients that are looking for executive holiday rentals are out of Sydney, Melbourne, Hong Kong and Singapore.”

Mr Williams said Broadbeach Waters, Mermaid Beach, Isle of Capri and also Paradise Waters were widely popular destinations.

Broadbeach Waters is a good place to put money into a holiday rental. Photo: Chris Bashall.

He informed investors considering buying a holiday home on the Gold Coast to search for something new, facing east or north to the water and having an occupancy rate of around 80 per cent.

“You also ought to have the kayaks and other small bits and pieces to guests.”

Sydney-based property buyer John Collis owns numerous holiday units around the Gold Coast and is about to settle on another five components in a block of eight apartments in Surfers Paradise.

Mr Collis said he did his research prior to buying the possessions and made sure they could create returns of between six and eight per cent.

“The goal would be for me to purchase a few apartments per annum for the next five to six decades so that way when I relocate Sydney when I eventually retire, I’ll have a terrific lease return,” Mr Collis said.

“Using Sydney, you are paying double the price for the same yields, and as you don’t receive the capital increase to the Gold Coast which you do in Sydney, the marketplace there’s starting to ease up so that I presume investing on the Gold Coast and getting an eight per cent return is very great.”

The view from the unit at 3346 Chevron Renaissance, which has only been bought as an investment property.

In a time when family members make the most of collectively owned holiday houses, buyers are also being cautioned to establish the rules of engagement for the employment, management and maintenance of a shared investment land.

Raine & Horne executive chairman Angus Raine said it was essential for all parties to consent to a lodging schedule for the holiday home to manage peak intervals, as well as responsibilities for maintenance and cleaning.

“Several weeks like Christmas and Easter, which is only 12 weeks away, are more precious than others, but by choosing a common-sense strategy, it’s likely to visit a solution that is appropriate to all parties,” he said.

HOLIDAY HOTSPOTS FOR UNITS

Suburb Median Asking Rent 12 month change

BROADBEACH WATERS $450 15.4%

(Resource: LJ Hooker Research / CoreLogic)

HOLIDAY HOTSPOTS FOR HOUSES

Suburb Median Asking Rent 12 month change

SURFERS PARADISE $700 16.7%

(Resource: LJ Hooker Research / CoreLogic)

source http://www.linbycaravans.com/it-is-boom-time-but-life-is-not-a-beach-for-vacation-home-owners/