Investing in a holiday home

Have you just been on holiday at a Bach by the beach and now find yourself looking up ‘holiday homes to buy’? You are not alone!

Owning a holiday home really is part of the kiwi dream and with platforms such as AirBnB and Book a Bach, it’s even more accessible. You can rent it out to help cover your costs during the times you won't be there and can even use it as a retirement option in the future.

There is something special about buying a holiday home, holidaying there year after year, and creating memories with friends and family but there are some things to consider before you take the leap.

Will you rent it out while you aren't there?

Renting out your holiday home while you aren't there is a great way to help cover some of the costs associated with owning a second property. Getting advice on where to purchase your holiday home is important as, in some areas, it will be hard to rent out a holiday home in the offseason, in others, you may be able to rent it out year long.

Keeping it for yourself

If you choose not to rent out your holiday home, you will need to make sure you can cover the costs of a second mortgage (if you have one) and maintenance costs. It is a lot cheaper to just rent a bach when you want to go away but buying a holiday home can still be a good investment depending on location.

Going in with others

A great way to make the kiwi dream happen is by purchasing a holiday home with friends and/or family. You share the risk, costs and you can either holiday separately or together. When buying a property with others, it's always important to layout exactly how things will run to ensure a smooth operation.

Buying land

While buying a holiday home can be unaffordable, buying a piece of land with a plan to build something in the future might not be. You can still pitch a tent there in the meantime and create some happy memories, although as you won't be able to rent it out to cover costs, you will need to cover the extra repayments on the land.

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We advise on things such as loan structure, budgeting and our view on interest rates. Bank employees technically aren't allowed to give their view on these and if they do it’s in favour of their bank.

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