If you are purchasing a second home with a view to renting it out some or all of the time, it's important to bear in mind the seasonality of the area in which you are buying. Whether it’s a city apartment in Paris, a ski chalet in Morzine or a villa in Greece, seasonality can be a big factor in your investment's profitability.
As a general rule, city apartments have the longest rental season, however seasonality can impact profitability in ways other than simply occupancy. Coastal and ski properties, for example, routinely charge up to twice the usual rate for rentals during high seasons.
On the flip side, this can have implications on the return and profitability of a second home if it's not marketed correctly: any voids in bookings in high season can erode your annual returns.
According to Savills research, Croatia is one of the most seasonal areas, however in certain parts of the country things are changing rapidly. Says Kieran Kelleher, managing director of Savills associate Dream Estates Croatia: ‘The recent growth in tourism in Dubrovnik, together with the long summer season of over six months, is routinely giving owners a very healthy rental return.
'The popularity of the destination was given a boost by being used as a filming location, most famously for Game of Thrones. This, together with the expansion of Dubrovnik airport with new flights from a variety of new locations has bolstered growth in demand for accommodation.’
Although ski resorts may be famed for their winters, tourism authorities have long recognised the importance of the summer season, according to Jeremy Rollason, head of Savills Ski. ‘There’s a plethora of summer events across the Alps, including the Harley Days festival, which brings 15,000 tourists and 3,000 bikers to Portes du Soleil, and the annual Verbier festival for classical music.
'Although summer rental rates are usually 50 per cent of those in winter, this usually means longer stays and a higher occupancy rate of 80-90 per cent, proving that a ski chalet can be an investment for all seasons.'