Looking for baches for sale in NZ? Check out our bach buying guide

Before you start searching for a bach for sale it’s a good idea to get the boring stuff out of the way and speak to your lender to find out what you can afford. To get started you’ll need:

• A 20% deposit if you don’t plan to rent the holiday home out.
• A 40% deposit if you want to rent the property out as short-term accommodation.
• If the property is a new build you’ll only need a 20% deposit, even if you plan to rent it as a holiday home.

You’ll also need enough disposable income to service the mortgage on your bach and any other existing debt you have. It’s important to note that lenders may not count short- term rental income from your bach when assessing loan serviceability.

If the required deposit seems out of reach, there are other options available. If you’ve got over 20% equity in your home, your lender may consider letting you access that to use as a deposit. Alternatively, you could look to non-bank lenders, who may be more relaxed when it comes to deposit requirements.

When choosing a location for your bach, here are a few key questions to ask yourself:

• What can you afford?
• What’s close to your home and do you mind travelling?
• What type of stuff do you like to do on holiday?
• Do you prefer beach, mountain, lake or bush locations? Or something else?

Buyers in Auckland may look to Northland, the Bay of Islands, Coromandel, Waiheke, Great Barrier Island or further south to Ruapehu for skiing. Even further south you’ve got Lake Taupo, Gisborne and the east coast, all the way down to Martinborough and even Picton.

In the South Island there are dozens more popular holiday spots. There’s Nelson in the North and Kaikōura down the coast. Lake Tekapo and Twizel are popular holiday spots for Christchurch and Dunedin locals - as are Wānaka, Cromwell, Queenstown and Arrowtown.

If you’re struggling to choose, it’s a great idea to consider a location that appeals and spend a couple years holidaying there in short term rentals. With a few summers or ski seasons under your belt you’ll know if it’s the right place for you.

If your bach budget is limited there are plenty of low-cost alternatives to popular but expensive holiday hotspots like the Bay of Islands or Queenstown. Look to towns near these areas or a few hours away.

For example, instead of the Bay of Islands you could search for cheap baches for sale in the far north in locations like the Karikari Peninsula, Taipa and Coopers Beach. The drive from Auckland may be longer but properties are much cheaper. Similarly, Lake Maraetai in he central North Island is a cheaper alternative to Lake Taupo.

In the South Island beachfront property on the West Coast is generally affordable, whereas lakes nearby Wānaka and Queenstown such as Te Anau are just as scenic, without the outrageous prices.

Owning and maintaining a bach in Aotearoa New Zealand isn’t cheap - you’ll need to pay rates, repairs, maintenance, insurance and a mortgage. To help cover those costs many bach owners often turn their holiday homes into short term rental businesses.

If you’re successful you may be able to cover all your baches’ expenses, or even turn a profit. However, there are a few things to consider:

To ensure your property is desirable and frequently booked you’ll need to present it well, and possibly have professional photos taken.

You’ll need to either manage the property yourself or pay a short-term letting agency to manage it for you (which could cost anywhere from 8-15% of your rental income.)

Airbnb also charges a fee of 3% of the booking total.

Additionally, your income in certain locations may be seasonal. For example, holiday accommodation in the far north may only be busy during summer, whereas in mountain towns, holidaymakers may only book out during ski season.

As well as the costs of managing a short-term rental you’ll need to consider insurance. It’s important that you tell your insurance company exactly what you’re planning to do with your property. In most cases you’ll be covered for accidental damage by guests (possibly with an extra excess) but many insurance policies won’t cover you for intentional or malicious damage.

If you’re staying in the home and renting it out occasionally, a residential policy may do the trick, but if you’re renting it out most of the time you may need a commercial policy, which could cost more. The good thing about policies like this is they often include cover for lost income if you’re unable to lease your home.

Whatever you do, make sure you check your policy for terms around guests and commercial or business use before signing on the dotted line.

Holiday homes can be tricky when it comes to tax so it may be worth talking to an accountant before you start searching for baches for sale. Here are a few things to consider:

• Any genuine expenses of providing the accommodation are tax deductible. This includes mortgage interest, rates, insurance and Airbnb management fees.
• If you’re using your holiday home both personally and renting it out as a mixed use asset (MUA) rules apply. This means you’ll have to figure out the proportion of private VS commercial use then deduct expenses only for the commercial portion. There are a couple ways of doing this but talk to an accountant if you need help.
• If the gross income of your holiday accommodation is over $60,000 you’ll need to register for GST.

Tax can be confusing and if you leave yours until the last minute completing your tax return can be quite stressful (fees and penalties may also apply if you’re late). That’s why it’s a good idea to find an experienced tax accountant to help you early on in your bach purchase journey.