Holiday homes as investment property

A holiday home in a coastal hotspot can be an excellent investment, but is often much more than just the investment in bricks and mortar. It is a place where you can enjoy your holidays and time out, use as a retreat for remote working, rent it out when not in use, and later retire to.

Holiday homes differ from other property investments primarily due to their dual purpose as a lifestyle asset and potential income source. The investment decision is often also fundamentally different from purchasing a traditional residential buy-to-let or a commercial property. Unlike purely financial investments such as a buy-to-let which focuses solely on return on investment (ROI), a holiday home is often a blended asset in that it is part lifestyle, and part financial investment.

The personal utility is a key benefit as it provides a place for family holidays which builds lifelong memories without the recurring cost of booking annual accommodation. It serves as a personal work from anywhere retreat, a perfect escape for modern professionals leveraging the flexibility of remote work to swap the urban environment for the tranquillity of the ocean.

While the primary goal of other property investments is strictly monetary, a holiday home successfully bridges the gap between sound financial strategy and personal enrichment. As is the case with buy-to-let investments, holiday or second homes do come with additional maintenance and security costs. Should you wish to rent it out for part of the time, additional marketing and management costs will be incurred.

The upside of renting it out for part of the time, is that you could then benefit from the additional income stream which could cover these operational and marketing costs, mortgage payments, and provide a healthy cash flow.

Investing in well-located coastal properties also holds additional benefits as these have historically demonstrated strong capital growth, often outpacing other property segments, as demand for finite beachfront and scenic land continues to rise. The underlying tenet remains ensuring you make a good investment so that it not only retains its capital value, but appreciates further over time. 

Why Plettenberg Bay is the Hotspot for Holiday Home Investors
The Plettenberg Bay property market has experienced tremendous growth and expansion over the last few years. Market data shows it has become one of the most desirable and best-performing markets achieving some of the highest prices. The market expanded notably with the onset of the Covid-pandemic and move of people in their droves to coastal locations to escape the pandemic risks and restrictions for healthier environments.

Reports from property analysts such as Lightstone have confirmed that the Plett property market has seen a striking surge in value in recent years, with some segments doubling in value, significantly outperforming the national property growth rate. This robust performance is a clear indicator of sustained demand and future potential.

Aside from the lifestyle, the tourism sector is a key driver of the Plettenberg Bay economy. Plett has six blue Flag beaches, the Keurbooms River, beautiful natural surroundings and attractions such as the Plettenberg Bay Wine Route, and various events which bring significant visitors. This offers the opportunity for property owners to capitalise on the demand for short-stay rentals.

Accessibility remains a great advantage for the Plettenberg Bay property market. Whether you choose to self-drive or fly, the town is very accessible. The proximity to Cape Town makes it a key market for Cape buyers, but a significant portion of buyers comes from Gauteng and other inland areas.

Proximity to the Garden Route towns including the regional commercial centre, George is another benefit for the market. This connectivity ensures that investors are buying into a location which offers a real respite from city living, yet with excellent amenities on hand, and conveniently close to the Garden Route, making Plett a compelling investment proposition.

As property specialists with over two-decades expertise, Seeff offers vital guidance to empower clients to make optimal investment decisions. We also offer property management and rental services. If you would like to know more about our services, or the great choice of properties that we are marketing, feel free to pop into our office on Main Road, or contact us today!

Yours in Property

Seeff Plettenberg Bay
0445330311
plett@seeff.com