Unlike a primary residence, where you’d prioritise personal preferences like location, quality of construction, amenities, or all the typically crucial factors, the success of a holiday home hinges primarily on a completely different metric: the quality of the operation.

The operation is the asset

When you buy a holiday home, you’re not just buying bricks and mortar; you’re acquiring a business. The property itself is obviously a valuable component, but it’s the rental operation that defines its financial performance. This operation includes everything from marketing and guest communication to cleaning and maintenance. A well-run operation will generate strong rental income, maintain high occupancy rates, and build a stellar reputation, which in turn enhances the property’s value. Conversely, a poorly managed property, no matter how beautiful, will struggle to attract guests and will not be a profitable investment.

This operational focus is critical for two reasons. First, the income generated is what will sustain your investment and provide a return. Second, and perhaps more importantly, the strength of the operation is the single most important factor when it comes to resale. The vacation property market is highly liquid, with homes changing hands far more frequently than traditional residential properties. A potential buyer isn’t just looking at the number of bedrooms; they’re buying into a proven, income-generating asset with a track record of success.

Vale da Lapa: A case study

The Vale da Lapa resort in Carvoeiro, Portugal, is a perfect example of this principle. From the outside, you see a stunning resort with beautiful villas, pools, and manicured gardens. But a savvy investor looks beyond the aesthetic. The unique selling proposition (USP) of a property here aren’t the stunning gardens, the numerous amenities or the stylish properties themselves; it’s the highly successful rental operation of the resort.

Vale da Lapa is managed by a well-established company, Details, S.A., which has decades of experience in the field and a strong reputation in the hospitality industry. Their operational expertise is reflected in the resort’s glowing reviews, with a remarkable 9.3/10 score on Booking.com.

This isn’t just about happy customers; it’s a direct indicator of profitability. A mature, professional operation like this ensures high occupancy. In 2024, the 2-bedroom townhouses at Vale da Lapa averaged a year-round occupancy of 78%, far exceeding the industry average. This level of performance is what defines the true value of the property, both today and in years to come. When it comes time to sell, you’re not just selling a property; you’re selling a profitable business with a proven track record, making it an incredibly attractive and valuable asset.

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