Buying a second property is a great idea, and if it is located somewhere remote with amazing views, it can surely double as your vacation home in Pakistan. But, there are several pros and cons of investing in a vacation home in Pakistan that you must be aware of before you make this decision. We’ve covered all the benefits and drawbacks of owning a vacation home below for your perusal.
The Pros of Buying a Vacation Home
We’ll cover both advantages and disadvantages of buying a holiday home in turn, so let’s begin with the positives:
- Extra Rental Income
- A Free Stay During the Holidays
- Future Retirement Home
- Perfect Venue for Gatherings
- Recreational Facilities
Here’s a detailed discussion on each of these pros of buying a vacation home.
Extra Rental Income
Most seasoned real estate investors buy a second home, not as a residence, but as an additional source of income, letting out their property to short-term or long-term tenants as per their convenience. Thus, one of the biggest benefits of buying a holiday home is that you get to rent out the property to tourists or even families who’d prefer to live in the area for an extended period. The best part is that rental rates record a spike during the peak vacation season, so you’ll be able to earn more with shorter stays.
You can either list the home online on a website like Zameen.com to find the tenants yourself or hire a local realtor who can ensure minimum vacancy and maximum occupancy rates to generate a constant stream of income.
A Free Stay During the Holidays
Of course, if you own a holiday home, there’s no need to pay for a room in a hotel or a motel for the duration of your stay. You get to enjoy the comforts of home, in scenic surroundings, and that too, free of cost. You can also invite as many people as you like to stay with you, provided you have the space to accommodate them and enjoy the holidays in peak season without being charged extra for guests, food, and rooms with a view.
It is recommended that you only rent out the property to short-term tenants if you want to use the home frequently so that a tenancy does not clash with your holiday plans. Buying a home in Murree Hills or New Murree is something you can consider, especially if you live in Islamabad, as the spot is just a short drive away and offers amazing weather all year round.
Future Retirement Home
It’s never too early to start planning for your retirement, and one of the major goals of retirement planning is to invest your money wisely and have a residence where you can relax and enjoy some peace and quiet. This means having a summer home to enjoy cooler temperatures and escape the heat of Karachi or Lahore, or a winter retreat to enjoy warmer weather in Pakistan if you are living overseas.
Perfect Venue for Gatherings
Do you love hosting large parties and family gatherings? If you live in a small home, buying a vacation property will give you the space you need to enjoy quality time with your friends and family. You can also host every gathering and event free of cost in a space that is large enough to accommodate all your guests. The beautiful views from the windows will just be an additional plus.
From birthdays to engagements, weddings, graduation parties, Eid Milan parties, annual family picnics, barbeques, and bonfires, a holiday home has the potential to be so much more than just a place to stay. It will be a venue to make new memories and celebrate amazing achievements in life with the people you love the most.
Most new real estate developments in Pakistan are housing communities that focus on not just offering accommodation, but also a range of other recreational amenities, including a clubhouse for residents, a golf course, indoor games, outdoor sports complex, playgrounds for kids, swimming pools, gymnasium, shopping and dining outlets, and more.
Patriata Resort Valley is one such project that you can consider for your investment in a vacation home. Located in New Murree (Patriata), the name says it all. You get a home of your own in a resort-like housing development, built amid the hills, with an array of facilities.
The Cons of Buying a Vacation Home
Well, since no post on the pros and cons of investing in a vacation home would be complete without having a look at the other side of the story, here are some drawbacks of buying a holiday home:
- Seasonal Charm
- Lack of Choices
- Difficulty in Property Maintenance
- Extra Strain on Your Monthly Budget
- Poor Resale Value
Now, let’s elaborate on these cons of buying a vacation home.
Vacation homes bring in rental income, and they are great as a retreat when you need to get away from the city, but the fact is that you need to choose the location wisely. Otherwise, you’ll end up with a holiday property that only holds its charm and appeal for tenants during the peak tourist season, leading to long vacancies during the off-peak months.
You’ll also have to work hard to attract people to your remotely located property even during the peak season, along with pricing it right so that you can get an edge over other rental options in the vicinity and secure a short-term tenant for your place.
Lack of Choices
While investing in a vacation home in Pakistan might seem like a great idea, you will not be spoilt for choice when you search the market. There are very few areas that are hot tourist spots in the country and even fewer with new housing developments being built for interested investors. As such, there’s very little variety in terms of investment options, and you’ll need to pick from the available homes only, severely limiting your choices
Difficulty in Property Maintenance
No matter how close you live to your second property, it is never close enough. Property maintenance is challenging even when you live in the same city, and in most cases, you’ll be investing in a holiday home in a different city or province altogether. This means hiring a trustworthy local to maintain the house and perform all the essential repairs for your tenants. Here are some of the things that most tenants will inspect in your property before signing a rental agreement.
The challenge of maintaining a house from a distance will become even more real if you are an Overseas Pakistani. In such a scenario, we’d advise you to not only hire a property manager but to also request a family member who lives in Pakistan to visit the property at least once in six months if you are unable to visit, so that you can rest assured that the property is being cared for and that it has not gone under illegal occupation of any sort.
Extra Strain on Your Monthly Budget
Unfortunately, no matter how much you earn during the holiday season, vacation homes do remain a costly venture during the rest of the months. This is because the property needs to be inspected for small repairs and professionals need to be hired to perform the repairs, every time you give it to a new tenant, and it needs maintenance and upkeep during the vacancies, too, to keep it in a condition that attracts further tenants in the following season. You might also want to hire a cleaning service for the vacation home once every tenant leaves. Moreover, hiring a local realtor and a property manager are two additional expenses that come as a package deal unless you want to take on everything yourself.
Poor Resale Value
Keep in mind that most vacation homes don’t sell easily when you make the purchase, though, as few people will actually want to live permanently in a remote location. Most people will not opt to buy a house in a region where they can easily rent one for a week or stay in a hotel. Thus, unless you’re able to find another investor with similar goals as your own, there’s a fair chance that finding buyers will be difficult, no matter how scenic the location might be.
Now you all about the pros and cons of investing in a vacation home. On the whole, here’s what to consider if you’re going to invest in a vacation home and if the odds are in your favour, and you have sufficient savings to manage both residences and the associated expenses, buying a second property is not a decision that you’ll regret in the long run.