The ongoing pandemic has had dramatic impact on property markets. The rental market too has not been left unscathed – current rentals have not just slowed to a crawl, but have in fact ground to a halt and even contracting.
And rents have been falling as tenants struggle to pay their dues. Tenants too are looking to move into similar-sized properties at lower rents.
The landlords are now caught in a rut, unable to find an escape out of the situation. The property market has suffered over the past five years after a period of expansion, as there have been dramatic changes in people’s mindsets and something unprecedented for such a short time period.
Saving grace?
While opting for a holiday home, do not be fooled by unrealistic projections. This category isn’t into magic solutions. But the landlord can be reasonably sure that the property as an asset will not depreciate and still be able to get a high single-digit return.
Most importantly, the possession of the property always remains with the owner – there is no need to worry about cheques not going through or tenants not leaving. On average, expect between 15-40 per cent more than what long-term rentals can fetch.
Check around
Ensure selecting the a management company to work with, do the homework. There are many good ones and each with its own strength. Visit the office and get to know their team, because they will be handling the guests.
Keep in mind managing holiday homes is a hospitality business and not a real estate game. Ask the question that if you are going on a vacation, would this management company be able to make the stay a comfortable one.