10 top yielding holiday investment hotspots

Holiday hotspots are a source of interest for many, and comparison website Finder have compiled a list of the top yielding areas that investors just might want to consider turning their gaze towards.

Using the top holiday destinations by postcode through Tripadvisor’s Travellers’ Choice Awards 2013, and ranking them by rental yield, sourced through Residex, they’ve provided the most popular areas that will also secure a good yield. Owning a holiday home has a number of pros and cons, and for those looking to make a good investment out of it primarily, it’s all about the return.

Michelle Hutchison, money expert for Finder, said that there is a dramatic difference in potential returns between houses and units, and also that just because an area is very much loved by tourists it doesn’t mean it will stack up in terms of rental yield.

“For instance, we found Hobart City to be the best value holiday hotspot to buy a house, but it came lowest on the list for units,” said Hutchison.

“The most popular holiday destination was Sydney, but it holds one of the worst performing rental yields for houses and mid-range for units. You could potentially buy three houses in Hobart with a fair amount left over and earn $1,290 per week in total, as opposed to one house in Sydney earning $1,190 per week – a difference of $5,200 per year.”

Melbourne, the second most popular holiday spot, was found to consistently lag behind in terms of rental yields.

“Surfer’s Paradise is a mixed bag, placing second last for yield rates in the housing market, but second for unit prices. If you’re thinking of investing there, units may be the way to go for potentially better returns,” she said.

See over page for the top 10 holiday hotspots for houses and units.