Buying a holiday let is exciting and daunting, often at the same time. On one hand, you will have the chance to enter the lucrative short term rentals market in cities such as Cape Town. On the other hand, you have so many things to consider before choosing your property. The area, the size of the property, whether it has sufficient space, whether it needs any renovation, how secure it is… there is so much to think about.
How do you know what to look for, and what to avoid, when buying this type of property? In this short guide, we will take a look at some of the warning signs to look out for when buying a holiday let so that you do not risk your investment opportunity.
Avoid These Things When Buying a Holiday Let
What sort of things should you be on the look out for when buying a holiday let? Some of the biggest things to avoid include the following:
- Making a rushed or impulsive decision when selecting property. View our list of mistakes to avoid when choosing a holiday rental property to find out exactly what sort of things you should look for in prospective properties. To summarise from that list, the biggest things to avoid include poorly located properties, fixer-uppers, cramped properties, unsafe properties and properties in noisy areas or complexes. Unlike a home that you will live in yourself, properties intended for holiday letting need to meet the demands of international travellers. Features that you will add value to your investment include swimming pools, en-suite bathrooms, gardens and decks to name just a few. Taking the time to evaluate properties objectively is vital. If you make a rushed decision, you may end up paying the price later when you can’t get enough bookings to make the investment worthwhile.
- Not doing your homework. Similarly, not taking the time to do your homework before you even start viewing properties is also a mistake. Every area offers its own pros and cons. From a holiday point of view, you will need to consider far more than beaches. You’ll also need to think about nearby facilities, transport availability, restaurants, safety, community and even reputation. The simplest way to succeed in the holiday rental market is to choose your area very wisely, according to cold hard facts rather than your own preferences. This means learning whatever you can on property investment, successful areas, projected income and other numbers that will help you determine where to buy. View our guide to the best areas for holiday property to see which areas perform well in Cape Town.
- Forgoing target market research. While you’re taking the time to look at your chosen area closely, you should also form a profile of your ideal guest. Who is your ideal target market? What would those guests look for when choosing a holiday home? The type of guest you attract will often be closely linked to the size and amenities of your property. For instance, if your target audience is single travellers or couples, then you would likely look at smaller, compact apartments and cottages. Likewise, if you plan to target larger groups, then you would need to look at larger properties. Honeymooners have very different needs to corporate travellers, too. Knowing this info in advance can simplify your search, giving you more direction on the type of property you should consider.
Once you have found a property, you will need to consider the best way to ensure that it is expertly run. Holiday rental property management offers not only active marketing across multiple channels, but also day to day management, bookings management and guest concierge. For an evaluation of your property, contact the Totalstay team to find about about managing your rental after buying a holiday let.