A Free Holiday Every Year

If you were lucky enough to get out of town over the last few months you may have been attracted by rental properties for sale in your favourite holiday destination.

Owning your own holiday apartment that earns an income does sound attractive, but you need to do your research.

There are different types of holiday rental properties. There are "normal" houses or apartments that are leased out on a short-term basis by the local agent, and there are properties that are part of a hotel style complex. These are often in a rental "pool" where the total income is divided between the properties.

The "headline" rental that the agents quote will usually look attractive. Income will be seasonal and management fees will also be significantly higher than those for standard rental properties. Always verify any income (and expense) figures an agent or developer quotes.

Holiday units often come furnished. As well as the usual repairs, you will receive regular bills for replacement toasters, TV remotes and other appliances. In a hotel style complex the management agreement may force you to replace the furniture on a regular basis too.

The owner pays for various expense items that would normally be the responsibility of a tenant, like electricity and Foxtel subscriptions. If your apartment is part of a hotel complex check with the management company for other expenses, like PAXB and cleaning charges.

Anything with a pool or lift will usually have high strata levies compared to a basic unit.

Different lenders have varying policies regarding serviced apartments and holiday let apartments, so always check with your Club Financial Service representative to see how this style of property will fit in with your portfolio.

Of course, you do get to use your property for your annual family getaway. You might want to avoid the peak season, as that is when you pull the bigger rents. At least in the middle of June you'll probably have the pool to yourself.

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