Is a Holiday Unit a good investment?

The returns from a holiday unit can be as good as a permanent letting, provided it is let for half the year at twice the normal rent. To qualify for depreciation allowances and other benefits, it must be treated as a BUSINESS PROPOSITION, not a luxury second house for the family.

If you want a unit PRIMARILY for your own and friends’ holidays, on the assumption it will serve as an investment as well, think again. Under these conditions none of the expenses, including interest, are tax deductible.

At the time you buy a holiday unit, it may be a popular destination. It is important to note that holidaymakers are fickle creatures. There’s a lot of Australian coastline to choose from. Most people want to use their holiday unit at peak times, and then wonder why it doesn’t perform as an investment. It could turn out to be an expensive luxury.

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