How do the airlines affect your holiday let property?

How do the airlines affect your holiday let property?

Posted on January 4, 2010 in Australia, Economics, Educational blog, Emotions, Finance, International, Off Plan, Property, Property Club, Rental, Sourcing, South Africa, UK

robert

Hi guys,

This past year has been a testing time for the airline industry, according to the media one million Christmases were at risk if the British Airways strike had gone ahead. This was only avoided by a last minute court injunction and just when it all looked well Scotland’s largest airline Flyglobspan went bust leaving thousands of people stranded.

So obviously this is bad news for tourists but how does this relate to property? Well thousands of us now own overseas investment property and it’s important to remember how critical the airlines role can play to these investments.

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The fall of Flyglobspan has affected property investors in Spain, Portugal, Cyprus and Egypt although this is not the only way airlines affect investors.

Airlines profit margins remain tight and many airlines have reduced flights or pulled unprofitable routes all together in the last 18 months.

Ryanair has had disputes with a number of airports over their charges in recent years and in some cases this has resulted in them in reducing flights to that airport or withdrawing all together. Shannon, Basel, Blackpool and Fuerte ventura airports have all been affected in recent years.

When looking for a holiday rental property an airport within a two hour commute is fundamental to your success. If your prospective holiday tenants are suddenly restricted in how they can visit you property this could have dramatic consequences on your cash flow. This could turn a profitable investment to a nightmare liability. Remember this is one of the extra considerations you need to make before investing abroad.

Cheers

Rob Bence

Robert is one of our newest Portfolio Managers and has been in the industry since 2004.

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