Carol and Bob had always dreamed of owning a holiday house. The problem was they could only afford to purchase a property out in the sticks, far away from any tourist attractions and two hours away from a major city.
After a year of owning the home and desperate to pay off more of the mortgage, they came to me for advice on how to increase the revenue. I had to ask them what had convinced them to buy a house so far off the beaten track?
The owners revealed the real estate agent had sold them the property on its future potential – saying the area was ‘guaranteed’ to turn into a tourism destination in the next 5 years.
I told Carol and Bob that we needed to think about all the ways to attract guests to their holiday home now, and not wait five years until the region becomes a destination.
We all dream of our own little escape pod
You know you’ve enjoyed your stay in a place if you find yourself standing outside a real estate agent in a coastal town, gazing at the ‘For Sale’ list, ice cream in your hand dripping on the footpath, crickets chirping and a dream beginning to form.
If you’re reading this owning a holiday house seems to be the ambition of many Australians, and in fact, one in every twelve households owns one (around 700,000 of them are owned by the 8.18 million households in this country)
When considering purchasing a holiday house and you need a steady stream of rental income to support its mortgage payments, a key consideration to ask yourself is, is this a location people want to travel to and holiday in?
Most potential guests consider the following when deciding what property to rent
- Destination – Is there a reason to go there? Attractions? Beaches?
- Location of holiday house to attractions – Can the guests walk to local restaurants? Beaches? as an example. Anything over 2 kms isn’t considered walkable.
- Amenities – All the great things you have e.g. pool table, number of bedrooms, bathrooms, Wi-Fi to name a few.
Unique Accommodation Offers
There are always some exceptions to the rule. Some Holiday Houses are very unique and people will travel to stay there as the holiday house is the destination. The photos below are of a small French themed cottage near Clunes in Victoria in the middle of a farm and this is the destination / experience.
Beautifully styled slice of France Beautifully styled slice of France
French styled cottage in Clunes
Understand your Market
My advice is always start by understanding the most visited tourist destinations in your State and then finding out what works for your budget. Below are the top 10 destinations in Victoria not in any particular order –
- Great Ocean Road
- Mornington Peninsula
- Echuca and the Murray
- Phillip Island
- The Grampians
- Yarra Valley and the Dandenongs
- Daylesford and Spa Country
- City of Melbourne, St Kilda and Fitzroy
What Accommodation is in the area?
Another way to understand if the area you like and potentially looking to buy in has a big enough market is to count all the accommodation offers. From hotels, motels, caravan parks and short term rentals which are Holiday Houses, it’s relatively easy to jump on the internet and search on AirBnB or HomeAway and count the holiday houses.
If the area has few or minimal accommodation it is either an untapped market or most likely the market and its opportunities are limited.
So, what about Carol and Bob?
Something I haven’t shared is that Carol and Bob loved the holiday house and saw it as somewhere they see themselves retiring to. They realised the STR (Short Term Rental) wouldn’t be as high as what they were hoping for, their plan now is to work with what they have and create a great experience for their guests.
If you would like to know more about owning a holiday house or increasing the income from your holiday house you can contact me through happyhouz.com.au I would love to hear from you.