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 ripper 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)

They’re seriously expensive. The days of cheap holiday homes are gone. A modest place within a couple of hours of a capital city can easily set you back $500,000 to $1 million+. And if you want it to feel like a proper getaway (not a shack), you’re likely signing up for a hefty mortgage.

Capital growth is usually weaker. Holiday locations tend to grow more slowly than capital cities. Demand is patchy, and when the economy turns sour, holiday homes are often the first assets people dump.

The vacancy trap. Most holiday homes sit empty for large chunks of the year. And here’s the kicker: those “free” stays are not free.

Let’s say you buy a $500,000 property at 6% interest. That’s $30,000 a year in interest alone. Add rates, insurance, land tax , power and maintenance — suddenly you’re staring at $40,000 a year, or about $800 per week, even when you’re not there.

At that price, you could rent a beautiful place when you need it — or take a couple of cracking overseas holidays instead.

Renting ruins the romance. Once you rent it out, the magic fades. You can’t furnish it how you like. You’re cleaning up after every visit. And if you want rental income, you’ll probably miss out on using it during peak periods.

Short-term rentals also come with higher wear and tear, plus management fees that can chew up 20% of your rent — compared to roughly 8% for long-term rentals.

You might get bored. At first, it’s exciting. But after the novelty wears off, some owners find themselves going less and less. Same place. Same view. Same café. The spark fades.

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.