15 Aug Buying A Bach
Summer weekends in the sun at the family bach; it’s been the Kiwi dream almost as long as there have been Kiwis to dream.
And when you’re on holiday beside the perfect beach, with the family squashed into a caravan or leaky tent, the dream of owning a bach is even more enticing. But it’s important to look before you leap. Here are some things to consider before you embrace the Kiwi dream.
Can you afford it?
It seems an obvious question but there are a few extra considerations. Mortgage advisors can help you by looking at your existing financial set-up and finding the best mortgage deals for you if you need them, as well as looking at your insurance needs.
You also need to consider if the purchase of a bach will be seen as an investment property, therefore triggering LVR deposit requirements. Beach houses can be exempt, it will generally come down to if you intend to rent it out and how often. Consider all the costs, not just the purchase price. As well as insurance, there are rates, utilities and ongoing maintenance to consider, just as with any other home. Nothing will kill the Kiwi bach dream more quickly than being stressed about the cost.
Speaking of maintenance …
… who is going to be responsible not just for the wear and tear repairs but the general upkeep? Do you want to spend a portion of each visit mowing lawns and fixing leaky windows? If not consider a property manager. Add it to your overall costs and if you can afford it, it’s worth it. That way your property can be kept well maintained and checked between short term rental tenants, so you can just relax and enjoy your visits.
Location, location, location
Spend more than one sunny weekend in your chosen location before buying. Remember you’re essentially committing yourself to spending most of your holidays in one spot. You need to be sure you like it and it has all the facilities, activities and attractions you’re looking for; this is true whether you’re looking for a beach bach, ski retreat or rural escape.
Recoup some costs
If you’re able to rent your bach out when you’re not using it can be a great way to offset some costs. Again, get good advice when you’re arranging your finance. Ideally you don’t want to be dependent on a high level of rental income to make the bach viable as that can be stressful – and it can mean you don’t get the benefits of having a bach yourself if you’re forced to rent it out at the best times of the year.
But managed well, some rental income can help cover maintenance costs and help you build equity. Talk to local agents and property managers about what rental rates and occupancy levels are like at different times of the year.