Buying Holiday Homes in Malindi Kenya
While having a great time in the sun by the sea, some would have been considered buying a holiday homes in Malindi Kenya.
Many think they can get the dual benefit of a rental income and a free holiday with their family.
I would be cautious about buying holiday homes in Malindi.
Make sure you are purchasing with your head and not just your heart.
Many investors kid themselves and tell their friends and family that they bought a holiday home for financial reasons, when, in reality, the main reason was lifestyle.
Most people fall in love with the idea of owning a holiday apartment and few pay much attention to the investment fundamentals.
So, just as before you would jump into any investment, ask yourself two simple questions:
- Why am I buying real estate in the first place?
- What end result does this particular property need to produce for me?
Make sure you are buying with your head and not just your heart
If you are looking at buying holiday homes in Malindi, either to let out for part of the year or as a permanent rental, let’s take a look at the pros and cons of investing in holiday properties…
During the good times all holiday properties perform well, but in the not so good times, secondary locations may suffer from low occupancy rates.
When selecting holiday investment properties choose a prime location with beach views near all the ‘must haves’ such as restaurants, cafes, shopping centers and tourist hotspots.
Buy in a town or city that has major infrastructure nearby otherwise you run the risk of fluctuating occupancy rates between peak periods.
Rental returns can fluctuate widely for holiday homes in Malindi.
In many coastal spots, the average period of strong demand for holiday rentals is 8 to 10 weeks a year with demand plummeting during winter.
Particularly along the Kenyan coast.
Demand is more consistent for holiday properties in warmer locations but only for prime properties.
Proximity to the beach and a sea view make a big difference when it comes to success with holiday letting.
If you buy a property further back from the beach maybe you should consider a permanent tenant rather than holiday letting.
3. Choose self-contained & Fully Furnished
Many holiday apartments were built for short term rentals and have small rooms.
While smaller or motel style apartments may yield a higher rental return on purchase price, you should choose a self-contained apartment with larger rooms and a separate kitchen, laundry, bathroom and bedrooms.
In general, this type of property should give you better capital growth and the option to move in yourself if you ever decide it’s time for a change of life style.
4. Do your sums ahead of your Holiday Homes in Malindi Investment
Holiday rentals are usually much higher than those for normal properties and increase even more in peak season.
This may make the initial sums for holiday properties look great and many are touted to return positive cash flows.