How to turn your holiday home purchase into a profit

OUTDOOR ENTERTAINING: According to Mike Mortlock, an addition of a roofed outdoor relaxation and entertainment area will drive holiday makers to your home. Photo - Shutterstock.
OUTDOOR ENTERTAINING: According to Mike Mortlock, an addition of a roofed outdoor relaxation and entertainment area will drive holiday makers to your home. Photo - Shutterstock.

Holiday homes have been selling like hotcakes this summer, and if want to know how to turn yours into a profitable investment, one industry expert has some strategies to help.

Mike Mortlock, managing director of MCG Quantity Surveyors, said anyone who's impulse bought a holiday home over Christmas must get serious about making it profitable.

"Australians invariably get caught up in the holiday romance of buying a 'weekender' and some will act on impulse while on vacation.

"Often, investors reason that by renting to holidaymakers when they aren't using it, the asset's maintenance and holding costs will be covered, but that's rarely the case."

Mr Mortlock said instead, owners must seek maximum rental income and depreciation benefits to make the investment viable.

"There are a few things that boost your home's appeal with holidaymakers which not only maximise rental income, but also deliver excellent tax depreciation benefits.

"This means, come the end of the financial year, you'll have more upside in your tax return thanks to your holiday home."

Climate control

"Ensuring your holiday home is airconditioned is essential for attracting holidaymakers.

"Vacationers will spend plenty of time relaxing at your short-stay, and they'll want their comfort levels to be spot on."

Mr Mortlock said guaranteeing your home has split system air-conditioning, and insulation not only helps improve the holiday experience for renters but delivers tax benefits too.

Pet appeal

"Holiday homes that are pet-friendly command a premium, as pet owners look to take their 'fur-babies' on holiday. But improvements which help create pet-friendly rentals also provide depreciation benefits. Think boundary fencing and hardwood floors.

Pools

"Even when near a beachside holiday spot, there's no denying the appeal of a pool when holidaying.

"If you've been fortunate to buy a home with a pool, don't forget to claim depreciation benefits on the fencing and filtration system."

This story Turn your holiday home dud into a diamond first appeared on Port Macquarie News.