Nowadays, more and more people are buying their own holiday homes. This is because they rather buying a holiday home for their own than spend a lot of their savings/ money on hotel bills.
In Malaysia, Penang is the second-largest island and is more modern living style compared to Langkawi. Penang receives a massive influx of tourists each year, some of whom even pay the state multiple visits for recreational holidays.
Well, if you are the person who also visit Penang a multiple times and never get tired of its environment, it is best to buy a holiday home for yourself and it can be rented out when you’re not in use. In today, we are going to share you the top 3 tips straight from PropertyGuru to make sure that you are buying a right holiday home which can makes you a significant profit, when you’re not in use.
1. Financing Your Vacation Home
How well equipped is the house and how gorgeous is its outdoor view depends on how heavy is your wallet. So before deciding upon a location, measure your financial reach and the market rates of places in Penang.
If you’re buying a constructed, furnished house, financing will primarily include:
➟ The Purchase – vacation home buyers mostly pay a downpayment of 10% to 30% and attain bank loan to pay the remaining. The locals can get up to 90% loan for their first or second home, and 70% loan for their third house onwards. Meanwhile, foreigners can get loans up to 70%, which is subject to certain terms and conditions
➟ Insurance – there is one downfall to buying a second home adjacent to blue oceans, crashing waves, and dense tropical forests. Natural hazards, such as floods and earthquakes tend to find their epicenters at such places. This puts your investment at the risk of irreversible destruction and makes insurance of the place a mandatory step in purchasing
➟ Maintenance – many vacation home buyers tend to overlook small fixtures, such as a leaky roof or a broken door knob, of their second home. These little details play a big hand in raising the rental value of your vacation home and making it more homey for you, too. So, prepare to set aside at least 20% of your rental earnings from the house for maintenance of the place each year
➟ Taxes – your vacation home is going to receive an ironic tender notice similar to the one you receive in your permanent residence if you delay paying your taxes. Whether it’s a vacation home or a permanent residence, paying your tax is mandatory.
2. Checking the Approachability of the Place
There’s no point in buying a vacation home in an area where nobody would want to live during their stay in Penang, even if you are fond of the place. For the most part of the year, the vacation home is going to be a rental property so it’s better to invest in a place you and other tourists or residents would be interested in.
When looking for such a fairyland area, consider the following:
➟ How approachable is the location to urban facilities and recreational/tourist attractions
➟ Is it really a place for tourists
➟ If you entertain the possibility of moving to this second home in the future, how suited is the place to your present and future lifestyle?
➟ The general security situation of the area
3. Renting It Out
Most vacation homes are rented out for the greater part of the year and this renting is accompanied by certain rules and regulations. Get in touch with a local real estate dealer and involve him in your financial matters.
Because you will be away from the place most of the time, a reliable realtor can look over the place, rent it out for profitable rates, and keep you in the loop with any amendments in the tax laws or market rates.
Last but not least, buying a holiday home have so much advantages; you need not to spend extra money for paying hotel bills, and your holiday home can bring you profit when you’re not in use. All you need to do is study the local taxes, research online what is the most favorite place for tourists, and engage with a right property agent.