It’s the time-honoured question of summer. You’re relaxing at your favourite holiday destination, the bags are packed with only the essentials – swimmers, sunscreen, T-shirts, some good books – and as you sip your wine while enjoying another perfect sunset you start to contemplate the joys of owning a bit of your personal paradise.
According to Brad Teal, owner of Brad Teal Woodards, 90 per cent of the decisions to buy a holiday home are made by the heart, not the head.
And what’s not to like about the idea? You have a second property in the place where you feel most at peace, where happy family memories are often created. It’s full of your own belongings, so it feels exactly like home. It’s always available whenever you need to escape the stresses and challenges of regular life and when you’re not using it you can generate income by leasing it out.
As Mr Teal quipped: “Familiarity breeds contentment. You get out of the car, you’ve got a tube of toothpaste already in the bathroom, a change clothes in the wardrobe – your weekend is set”.
But before making the significant financial commitment to purchase that cute little beach shack or country cabin, you need to set aside the heart’s desire and do some serious research.
“Holiday homes have to be accessible from a travel perspective,” said Mr Teal. “You don’t want to travel more than three hours – that’s a bit too far for the weekend.
“There are some very good options within 90 minutes or two hours of the CBD on either side of town. Travel time needs to be an important consideration.”
These include popular spots on the Mornington Peninsula like Portsea, Rosebud and Sorrento and, to the west, Torquay, St Leonards and Queenscliff.
Then there’s budget. Running a second home comes with all the same costs as the main family home – maintenance, utilities, council rates and there may also be land tax considerations.
“It has to be accommodated into the family budget,” said Mr Teal. “Whether it’s a caravan, a cabin, a home on a half-acre block, a villa in a complex or a flash house in Lorne, you’ve got to stick to your budget.
“And that varies depending on what you can afford. It can be a $1 million property at Ocean Grove, it can be a $300,000 cabin on the Murray, or a $250,000 shack in Portarlington.”
Renting your holiday home through an agency like Airbnb or Stayz when you’re not using it can generate some passive income but there are management costs to consider, extra maintenance and the uncertainty of off-season demand.
“You’ve got to have a lockable robe, things will get broken or go missing, and you need a higher standard of finish to attract return visits,” he said.
While the dream of sunny weekends and Christmas on the beach remain the prime motivators for buying holiday homes, there has been a shift in people’s thinking about their long-term goals.
The COVID-19 pandemic, its resulting lockdowns and working from home options has brought many sea and tree change plans forward and the holiday home could become a permanent home sooner than anticipated.
“People are questioning why they have to wait until they’re 65 and retired to make that change,” said Mr Teal. “They’re saying, ‘I’m 45 and I want to enjoy it now’, so they’re buying up big around regional centres like Bendigo, Ballarat and Daylesford.”