Sunrise over a cottage on the beach

Why a holiday home is a great investment

Holiday homes offer tourists the chance to experience new areas across the UK, all while enjoying their own private space and amenities. Statistics show that the holiday home trend has become more prominent in the past decade and that a demand for this type of accommodation is here to stay.

Owning a holiday home can offer the best of both worlds – it can be a valuable source of income and a haven for relaxation. With endless lodges for sale popping up all over the UK, prospective buyers have plenty of choice.

Whether you’re looking for a small cottage by the sea or a comfortable lodge in a rural setting, there are many advantages to owning one of your own.

Income potential

If you strike the right balance, investing in a holiday home can help you generate significant income. However, this requires careful planning and research. Factors that can affect how much you earn include the location, the property type and the occupancy rate.

Areas such as Cornwall and the Lake District are particularly desirable staycation destinations, giving you scope to charge more. If you have additional features such as a jacuzzi and a garden, this will help to attract more bookings. The goal is to increase your occupancy rate so that you have more bookings across the year to maximise income from your investment.

If you plan to use a letting agent, you should factor in the costs involved. While some holiday home owners have the time to manage and advertise their properties, others prefer to delegate this responsibility.

Diversity

A holiday home also offers a valuable hedge against economic downturns. It helps to diversify your property portfolio beyond the traditional buy-to-let market, which is heavily influenced by factors like interest rates and employment levels.

Meanwhile, the holiday home market caters to a different set of drivers. Tourism flourishes during periods of economic strength but can also offer resilience during downturns. Staycations become a more attractive option compared to expensive foreign trips, for example.

During the 2008 financial crisis, the traditional property sector took a significant hit, whereas staycations remained popular. This worked well for holiday home owners who were able to tap into this increasing demand. Having a diverse investment portfolio means you can benefit from better security even when the economy is taking a downturn.

Personal enjoyment

Let’s face it, who wouldn’t love a guaranteed escape whenever they please? Owning a holiday home removes the stress of booking hotels or scrambling for last-minute availability. It’s your home away from home, ready for family getaways or solo retreats.

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