WHAT TO LOOK FOR IN A COASTAL HOME
Category Industry News
There is much debate as to whether purchasing a holiday home is a viable investment, especially when considering the costs involved in the upkeep of a property. However, as with any property purchase the success of the investment is largely based on the research done beforehand and how the investment is viewed by the buyer. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, a holiday home purchase can be one of the best investments that a buyer can make, provided they have a long term view on the purchase of such property.
“If handled in the correct manner and the necessary property investment principles are adhered to, purchasing a holiday home can be seen as a vehicle in which to build wealth. The investor should view the property as a way to put money aside for their retirement, rather than leaving that money in a bank account,” says Goslett. “Many investors are particularly interested in purchasing coastal properties with the view that they will retire to the coast in their golden years. If the investors purchase the property early enough, by the time they get to retirement age they will have a fully paid off home to which they can retire.”
He notes that an additional benefit is that the investor would have had the full use of the property and a place to take their family to over holiday periods before they retire. “Often people live inland and then retire to the coast away from their family and support network. Owning a coastal property that becomes a home-away-from-home allows the investor to establish friendships and build a network in the area in which they decide to retire. This makes the process of retiring and moving to a new home far less stressful,” says Goslett.
He notes that over the years the property will appreciate in value and the investor will be able to sell their primary residence in order to get the cash flow that they will require to sustain themselves.
Goslett points out that while there are many benefits to owning a coastal home, there are also some negative aspects that the investor will need to consider, such as the fact that coastal properties generally require more maintenance than inland homes. “Due to the climate and proximity to the ocean, coastal properties are often exposed to some harsh elements that take their toll on the home. As a result a coastal property will require regular maintenance. If considering a freestanding property it is best to opt for modern, recently built homes reduce the maintenance costs from the onset,” advises Goslett. “Sectional title units are an ideal option for investors who do not want to worry about the exterior maintenance of the property. When purchasing a sectional title unit the body corporate will be responsible for maintaining the building’s exterior and all the common areas within the complex.”
According to Goslett, because the investor often lives far away from their coastal property it is sometimes difficult to gauge the market and how the area is developing. “Ideally the investor should start to build a long-term relationship with a reputable management agent who specialises in the area. The managing agent will be able to take care of the management of the property, offer advice on the investment and keep the investor informed of any trends that might be occurring in the area. Working with a real estate professional will keep the investor focused on the facts and not be driven to make any investment decision based on emotions,” says Goslett.
Looking at coastal property investment over the last decade, Goslett says that there are a few factors that investors should pay attention to as they can influence demand and potential appreciation in value over time:
• Properties with ocean views are generally highly sought-after and hold their value.
• Homes that are within proximity to the beach are usually regarded as a sound investment.
• There is a quicker turnaround time on coastal properties that are close to amenities such as schools, medical facilities and shopping centres.
• Security is a driving force behind property buying decisions, so opt for an area with an active Policing Forum.
• Consider whether the property will be popular among holidaymakers so that it can be let out should the need arise.
• Low maintenance properties are generally sought-after among holiday home investors.
“A coastal home purchase can be a viable investment option, provided the investor takes the time to do the research. Obtaining as much information as possible from reliable resources will help the investor to make an informed and profitable decision,” Goslett concludes.
Author: REMAX SA