Tons of people desire having their own private getaway, whether in the midst of the Cape Town beachy breeze’s or hidden away between tranquil bushes. Either way, the concept of a home away from home, or if you may – an escape, may appear to be only a fantasy. Conversely, seeing as our holiday possibilities are a lot more limited now (shoutout to COVID), perhaps it’s high time to start making your dream your reality. Essentially, it only means spontaneous weekends away without the trouble of bookings and spending thousands of rands during peak holiday rental periods!
First Things First: Budget and Research
Decide on a price range based on your budget. Your risk profile, as well as whether you own an existing property should also be considered, as it will play a role in determining your pre-approval on finance. Conduct extensive research on the neighbourhoods that interest you – this will allow you to establish a list of your preferred properties within your budget, while allowing you the ability to assess your means of finance. It helps to itemise the properties based on your preferences and their financial viability. Remember, you want a property that you may still be able to re-sell at a high rate within a few years’ time.
X Marks the Spot!
An important element to consider when house hunting is determining your definition of the perfect getaway. Are you a lover of the beach and soft, fluffy white sand brushing against your toes? Are you more of a mountaineer? Or are you perhaps more into the idea of sipping on a homemade ginger ale on a farm far from any civilization? Check out locations that would cater to your favourite pastimes. You probably won’t get much surfing or fishing out of a house in the mountains, but the hikes and rock climbing are definitely something to look forward to. This property will likely be your holiday ‘go to’ for many years. Therefore, ask yourself the following question: Does this property fit my way of life as well as my tastes? Will I be able to sell it at a higher resale worth down the line? If you’re planning on having this home as your retirement home, then easy access to the mall, medical care, and other community services are definitely things to take into account when buying your first holiday home.
Running Costs
Holiday rentals might no longer be a problem, but that doesn’t mean your wallet will come out scot-free. Determine whether you’ll be able to pay the running costs, which would consist of your water and lights bill, levies, refuse removal, rates and taxes, upkeep, reparation and renovation, and house insurance, only to name a few. Moreover, you’ll need to ensure you’ve furnished the place, which really doesn’t come cheap either! Being aware of all these running costs will help you determine whether or not you should rent out your home when not in use in order to help pay for these costs, or if you would rather keep it as a quiet family getaway home.
What Do You Look for in a Holiday Home?
How many people would you like the house to accommodate? Will you spend a large amount of time in the living room or kitchen? If so, consider the size of the communal rooms. Are you looking for the perfect landscape? Do you want to live close to other people? Do you want a ready-made holiday house or are you rather looking for a project to fix up? Would you prefer a free-standing home or a house within a secure estate? Do you want easy access to the mall? Is a private pool on your checklist? Would you need a large area to accommodate lots of guests and various activities? These should all be contemplated before jumping into the purchase of a vacation home.
Would This Serve as a Rental Property?
Receiving a rental income for your property would greatly reduce your running costs. Given the correct circumstances, you may even be able to flip a profit out of it. Short term leasing contracts as well as serving as an Airbnb host are some of the best ways to receive an income out of your property. Even if your profit is minimal, it could help you pay for house insurance and running costs.
Estate Agents
Having an estate agent look after your property helps to greatly reduce stress and dealing with difficult renters. This is a luxury, but it’s also something else you’ll need to budget for.
Short-term rentals such as those done through Airbnb will also call for the cost of cleaning the room after every occupant. You can either employ someone to serve as a caretaker, or have your estate agent assist with the whole process as well. These expenses also depend on different locations, so of course, a holiday beach house in Umhlanga will have much higher costs as opposed to a house by the Vaal dam. However, this also means that Umhlanga would have a greater chance of providing you with a higher profit out of your rentals.
How Will This Affect Your Taxes?
If it’ll be your first time renting out your property, considering getting a tax practitioner to assist you on your home rental is a wise choice. That being said, you may also claim deductions for your expenses.
If your holiday home also serves as an investment, some of your upkeep and ongoing expenses may be tax deductible. This would include running costs, renovations, and interest on your home loan. A tax practitioner would be able to assist you in this regard.
Your Home, Your Style
Now that you’re done with the pressing matters, it’s time to break out of your shell. A great place to start when deciding on a style would be to select a theme that would complement the surrounding landscapes. Aim for something that is simple, yet comfortable, to you and your family. Bear in mind: the less upkeep costs that are required, the more you’ll have to spend while on holiday. Make sure your couches and dining table can comfortably accommodate the entire family and perhaps a few close friends. You don’t need the fanciest and most expensive things in your cupboards, however luxuries, such as a great espresso machine, are definitely worth considering!
