How Investors Are Creating Long-Term Real Estate Value with Holiday Villas
Experts reveal that the short-term rental market is evolving, with investors becoming more discerning about factors like location, durability, and management quality.
Real EstateVilla RentalsInvestmentProperty ManagementLuxury VillasReal EstateJun 27, 2025
Varun Nagpal, Founder of Vianaar, said villas are being viewed as appreciating assets that also generate income. He noted that many people prefer villa stays when traveling with family or friends, given the space and privacy these homes offer compared to hotels.
Nagpal observed that people now value privacy, space, and a stronger connection to nature. He added that villas offer features like private pools and gardens, making the stay more personal and comfortable.
Caroline Mulliez, CEO of The Blue Kite, which manages villa rentals, said about 80% of second-home buyers rent out their homes. While they may use them occasionally for personal vacations, most view the property primarily as an investment. She added that homes managed professionally tend to be better maintained, and consistent upkeep helps preserve asset value.
Nagpal pointed out that many of today’s homeowners are looking to generate passive income from their properties. Returns from villa rentals often outperform urban rental yields, particularly when combined with long-term capital appreciation.
According to Mulliez, buyers are seeking homes that meet certain standards. Properties are selected for their condition, design quality, and location.
Mulliez highlighted several common mistakes investors make:
- Buying in the wrong location — homes situated farther from the coastline or across highways are harder to rent.
- Overspending on décor and branded furnishings, which do not necessarily raise rental income but can lead to high replacement costs.
- Relying on part-time help or self-management, which often leads to inconsistent guest experiences.
Nagpal added that second homes today are being planned with a focus on both aesthetics and long-term usability. He said that many buyers now expect end-to-end support — from construction to maintenance to rental management — which helps them avoid the burden of daily operations.
Mulliez said strict quality filters are applied while onboarding properties. These include the availability of natural light in all rooms, proper cross-ventilation, and practical design elements like split ACs. Such details, she said, make the difference between a basic rental and a comfortable, liveable home.
Frequently Asked Questions
What are the primary reasons people are investing in holiday villas?
People are investing in holiday villas to generate passive income and create long-term real estate value. These properties offer more privacy and space compared to hotels, making them attractive to travelers.
What are the key factors that drive the performance of villa rentals?
The key factors that drive the performance of villa rentals include location, durability, and management quality. Properties in prime locations, well-maintained, and professionally managed tend to perform better.
What are some common mistakes investors make when buying holiday villas?
Common mistakes include buying in the wrong location, overspending on décor and branded furnishings, and relying on part-time help or self-management, which can lead to inconsistent guest experiences.
Why is professional management important for holiday villas?
Professional management ensures consistent upkeep and maintenance, which helps preserve the asset's value. It also provides a better guest experience, leading to higher occupancy rates and better reviews.
What are the key features that make a holiday villa more attractive to renters?
Key features that make a holiday villa more attractive include natural light, proper cross-ventilation, private pools, gardens, and practical design elements like split ACs. These features enhance comfort and livability.
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