The Hidden Truth About Holiday Homes...No One Tells You!

Let’s tackle one of the questions we get asked all the time...
'Should I buy a holiday home?' ...It’s a great question!

And like most money decisions, the right answer depends on whether you’re thinking with your head… or your heart.

So let’s walk through the good, the bad, and the downright ugly — so you can make a smart call before you sign anything.

Why the idea is so tempting

We all love escaping over summer — down to the coast, up to the country, feet up, sun on your face, barbie sizzling, kids laughing. Life feels good.

And that’s when it hits you:

“Why don’t we just buy our own place?”

The town is buzzing. The weather’s perfect. Every man and his dog seems to own a holiday shack. You wander past the local real estate window, start picturing Christmas lunches, long weekends, and family memories.

And that’s the danger zone.

Because decisions made on holidays — cocktails in hand — are rarely good financial decisions.

So before you fall in love, let’s run the numbers.

The upside of buying a holiday home

A place that’s yours .You’ve got a second home — somewhere familiar, comfortable, and full of memories with family and friends.

Total freedom. No fighting for bookings. No peak-season price gouging. You can pack the car and go whenever you like.

Potential capital growth. Over the long term, the property might increase in value.

Rental income. Many owners rent their place out when they’re not using it. In peak season, rents can look eye-watering. Plus, there may be tax deductions if the property runs at a loss.

So far, so good… right?

Now comes the reality check.

The downsides (and this is where most people trip up)

Let’s start with the elephant in the room: holiday homes are seriously expensive.

The days of snapping up a cheap weekender are long gone. These days, a pretty ordinary place within a couple of hours of a capital city can easily cost you $500,000 to $1 million.

And if you want it to actually feel like a holiday — not a creaky old shack with spider webs — you’re signing up for a chunky mortgage.

Then there’s capital growth… or lack of it. Holiday spots usually don’t grow like capital cities. Demand can be patchy, and when the economy hits a pothole, holiday homes are often the first things people offload. They’re a luxury, not a necessity.

Next comes the vacancy trap. Most holiday homes sit empty for big chunks of the year.

And here’s the bit people don’t like to talk about: those “free” weekends away?

They’re not free at all.Let’s put some real numbers on it. Say you buy a $500,000 place and pay 6% interest. That’s $30,000 a year in interest alone.

Then pile on rates, insurance, land tax, power and maintenance, and suddenly you’re staring down $40,000 a year — around $800 a week — even when no one’s using it.

For that kind of money, you could rent a beautiful place whenever you feel like it… or take a couple of cracking overseas holidays instead.

And if you think renting it out will save the day, here’s the reality check: renting kills the romance.Once strangers start staying there, it’s no longer your place.

You can’t furnish it how you want. You’re cleaning up after every visit.

And if you want decent rental income, guess when you’ll be blocked out? Yep — peak holiday periods.Short-term rentals also mean more wear and tear, plus management fees that can chew up 20% of your rent, 

And finally, the one no one warns you about: you might just get bored.At first it’s magic. But after a while, some owners find they’re going less and less. Same drive. Same view. Same café. The sparkle fades.

A holiday home can be a dream — but for many Aussies, it quietly turns into a very expensive habit.

So… should you buy one?

Here’s the bottom line...

 If you’re buying to make money — don’t. There are far better options.

An inner-city investment property rented out year-round can provide stronger growth and steady income — which you can then use to holiday wherever (and whenever) you like.

 If you’re buying with your heart — slow down.

Before committing, rent in the area for one year. See how it feels in winter. In the off-season. When the tourists are gone.  And how much you actually use it. That little test drive could save you hundreds of thousands of dollars.

Because the best holiday is one that doesn’t come with a lifelong mortgage hangover.