The term ‘Lifestyle Property’ usually springs to mind with coastal properties that purchasers can spend their summers in and rent out for the rest of the year. However, Lifestyle Properties offer a lot more than this!
Lifestyle Property is a term used whenever the purchaser wants to find a balance between investment and lifestyle by renting out their properties on a short let basis, and occupying it themselves during other time periods.
What is ‘Lifestyle Property’?
Lifestyle Properties can be positioned anywhere, whether it be the coast, city or rural areas. You can rent out a property on a short let basis, and during other periods live there yourself. Not all of these properties are for leisure. Perhaps you travel frequently and require somewhere for a couple of months a year for work or family commitments, and owning a property provides more stability than renting?
What are the risks?
Lifestyle properties have similar risks to all types of investments. This is why when looking at any type of investment, property or shares, it is important to research thoroughly and choose an option tailored to your expectations and requirements. In the property market, researching the area and the market of your potential property is crucial to making a wise choice.
What is the return like on lifestyle properties?
Many factors go into return rates, which makes it difficult to draw a comparison between lifestyle properties and other types of investment. Based on factors such as location, developing infrastructure, and property demand at that time a lifestyle property may perform either better or worse than another property type. Like all investment properties, your returns are partially reliant on the factors affecting the property at the time.
It is important to decide what your goals are. If you are after a holiday home you can make income off during the year, and can be claimed as a tax offset, a lifestyle property may suit your needs. However, if you are after a more reliable source of extra income or investment, the more traditional type of investment property may suit your investment needs.
When is the right time to buy a lifestyle property?
Purchasing at the lower end of the property cycle is always best, as in these market environments, there are added incentives from developers. These can include, and are not limited to, rental guarantees, furniture packages and price reductions.
It can be hard to time the real estate cycle, but any type of investment property is a long term decision and it pays to research. Minimise your risk factors by determining if the area is growing, what type of returns you can realistically expect from a property, as well as how you will ride out any risks which may arise.
Lifestyle Properties – A Summary
- Lifestyle properties refers to any property that a purchaser chooses to both rent out on a short let basis, as well as occupy it themselves, offering a lifestyle balance with their investment.
- The strength of return on lifestyle investment properties depends on individual factors of the property investment such as location, infrastructure and property demand.
- Right now is a good time to invest in lifestyle properties, with developers offering added incentives.
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