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Helpful Hints

Buying a Holiday Home... Is it worth it?

Longing for a sea change or tree change? It pays to do your research

Ever wished you could own a little slice of your favourite holiday paradise and make money as well? We asked David Rankin, award winning bank manager and founder of sort my money (sortmymooney.com.au) about the pros and cons of investing in a holiday home…

Use your head, not your heart

The idea of beach swims every morning or long country walks sounds like heaven, but if you’re considering buying a holiday house, ask yourself if you can truly finance it. ‘Any investment decision should be made by the head, not the heart,’ David says. ‘It should also be made in the knowledge that no investment is guaranteed to succeed. You budget should allow you to absorb the costs of potential failure, but to plan for success.’

Will you make money if you rent it out on Stayz or Airbnb?

These services offer a good opportunity to make some cash, especially during holiday periods, but you’ll also need to account for the quieter periods. David recommends doing detailed cash-flow forecasting. ‘Forecasting builds in busy rental times and vacant periods according to the seasonal fluctuations of the area. It is a must,’ he says. ‘Once you have this forecasting in place, tighten the screws a notch – by reducing income expectations over time – to see If your projected figures still stack up.’

Consider your ongoing costs

David advises potential investors to consider the ongoing expenses of council and water rates, real estate fees if you are renting it out, emergency maintenance at a time when the house is occupied by holiday tenants (keep in mind this can be most costly In less populated areas), as well as property insurance and ongoing maintenance such as gardening and cleaning. ‘you also need to consider higher default interest rates for investment properties, due to rules that were brought in by the APRA, the bank regulator, at the end of 2014, if you borrow to purchase a property,’ David says. ‘Constant access to sufficient spare cash is therefore a necessity.’

Do your research

Check out domain.com.au or realestate.com.au to find out what the capital growth looks like for areas you’re interested in, and go and stay there to get to know all the streets. ‘It’s a good idea to hire a holiday house at least once before committing to purchase one,’ David says. ‘You might end up finding that one week a year manages to scratch the holiday home itch for you. And if is doesn’t, it’s a chance to experience a holiday home from the tenants point of view – an invaluable experience for the future if you do decide to invest.’

Referenced from New Idea Magazine

David Rankin, founder of ‘Sort My Money’

IS IT BETTER TO ADD VALUE TO YOUR HOME OR BUY A NEW HOME?

Your home is outdated and you’re trying to decide if renovating is your best option, or if you should sell and move to a new property. I get this question a lot from home owners. “If I add value to my home would I be able to sell for more, including all the costs in renovating or am I best to sell as is and buy a new home that suits our needs? My answer is; “if you are happy in your location you are best to stay and renovate. If the home does not suit your needs, you are best to sell and move on”.

There are many factors to consider when deciding whether to renovate or buy a new property. To help you decide, there are three important steps to follow to help you reach your decision.

1) Be really clear about the type of property you want.
This requires you to think about your immediate and future requirements. Whatever your needs, you should compare and contrast them with your current home to help identify any major gaps or shortcomings.

2) Compare property values in your street and suburb.
This is a very important step. This goes to the heart of assessing how your property stacks up against everyone else’s, and whether there are any major price differentials. The reason for doing this is twofold. Firstly, to help you decide if it’s worth putting the time, effort and money into renovating, and secondly to help reduce the likelihood of over capitalising – that is, spending too much on your renovation.

3) Do your sums
Once you’ve completed steps one and two, it’s time to start crunching some numbers and prepare a budget. Doing your sums is the financial side of the equation, and is all about letting you know what you can reasonably afford – which in itself may determine your best option.

Whether you renovate or sell, it is often a balance between what best fits your personal lifestyle needs, what’s affordable, what’s less disruptive and what gives you the best chance of long-term capital growth. However, if you plan to sell your property within the next one to two years, be very mindful of undertaking a major renovation project – you need to make sure you can at least recoup the cost of your investment.

Is it better to add value to your home or sell?

Holiday Home Rental v’s Permanent Rental

Welcome and how are you enjoying my corner chat? I do hope you are finding my chats interesting. I am going to talk about holiday homes on Phillip Island.

When I am out either driving around the island or on my scooter ”Marilyn” delivering flyers or whatever, I have noticed many homes with curtains down. Obviously there are many homes on Phillip Island that are holiday homes. I ask myself, how many of these homes are permanently rented or rented as holiday homes or just for the owners to have a holiday or short break when they desire.

Have you, the owners of these holiday homes contemplated listing your property as a holiday rental? This can be a great way to increase your return on investment. Phillip Island is a beautiful destination for holiday makers. At Stayz.com.au they have over 700,000 people each month looking for a holiday rental accommodation so why not make the most of this opportunity with your property. I believe there are over 300 Airbnb’s on the Island as well.

Many people, when considering renting their property, believe that permanent letting will ensure the best rental return and hassle free investment. However renting a holiday property can be a highly profitable endeavour.

By renting out your holiday home, it may be possible to charge (permanent) monthly rent for just a one week holiday stay. Renting your property for only 12 weeks a year as a holiday rental would then generate the same investment return as a permanent rental. Any additional weeks simply increase your return and the property is still available for you to enjoy for your own holidays.

Obviously you would have to do your due diligence to decide if your holiday property would be suitable as a holiday rental home or as a permanent rental.

Dianne Ray Realty is offering holiday rental management, under the name Beach Holiday Homes Phillip Island. If you interesting in discussing your holiday home with Dianne please contact her. Dianne does live on the Island, is honest, thorough, charges a bond and offers a professional, personal and friendly service.

Dianne's Helpful Hints for Home Sellers

Preparation is Everything

Welcome to the first corner chat. Hope you find all the future chats interesting. To start with I am going to talk about getting your home ready for sale.

You’ve decided to sell your car, so you do your research; find out what other cars on the market are selling for, set a dollar value of what you want, and then set about prepping the car for sale. You polish the outside, detail the inside, and once you’re happy with the appearance, stand back and smile or cry depending on your circumstances. Ultimately, you want the best dollar for your car.

Homes are no different! It’s a big decision to sell your home, and even though a house and car are different in value, the preparation is equally as important. To make sure your home stands out from the rest, detail it as if you’re selling it for someone else to enjoy.

Set a time line; make a list of things that need to be done including general maintenance, which is always overlooked. Buyers dictate the current market, get a Real Estate Agent and obtain a Comparative Market Analysis (CMA) to see what price the market will bare. Even though you will want a certain dollar value, you have to be realistic; otherwise your home will not sell.

Stand out and be prepared! Dianne is available to help you and she is also offering a free book ‘How to Sell your Home for More’. Contact her on 5952 5480 or 0408 034 080 to obtain your free copy or just after advice.

How to Get Ready To Sell for More

Firstly, an invaluable book for sellers to read is “How to Sell Your Home for More” Quote on page 1, “I discovered very early in selling homes, that a little time taken to enhance the visual appeal of a property substantially increases the chance of the seller achieving a better selling price”. If you would like a free copy please contact Dianne on 0408 034 080 or 5952 5480 or email dianne@diannerayrealty.com.au.

It is a known fact the first 10 seconds when buyers enter your property is so important. The buyer will either like what they see or be turned off very quickly.

Your home does not have a recommended retail price, so if you are in control of the sale, you are able to significantly impact the final sale price you achieve. One of the key ways to sell for more is by knowing how to present your home for sale. By changing it’s “packaging”.

Have you ever heard about a friend or family member who had a ‘dream sale’? You know, the one where the first person to walk in the door absolutely loved the house and bought it on the spot? Or had three buyers fighting over it, making higher and higher offers? If you want that to be your experience, you need to focus on that result and do exactly what it takes to achieve it.

Yes, it’s finally happened! The real estate industry in Australia has caught up with mainstream consumer marketing. It is no longer acceptable to pass off home’s that are unfinished or poorly presented in the hope that your buyers will overlook these flaws in favour of your home’s more positive characteristics.

Before you do anything, you have to stop thinking of your house as a HOME and start thinking of it as a product on the market. And just like any other consumer product, you have competition and need to give buyers a reason to choose YOUR property over another. One of the keys here is that the right presentation is proven to sell…give your buyers what they are looking for, and your home will get loads of views, competitive offers, and get quickly snapped up – for a premium price!

You can’t use old-school selling strategies anymore and expect to achieve a premium sales result. You must change too. What use to work 5-10 years ago simply doesn’t’ work now. The evidence is in. Here is the thing the big marketers know and use every day. Emotions drive sales. So the right presentation of your home is critical. Have you ever seen an empty display home? No?

Do you want to attract premium buyers – or bargain hunters?

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