Investing in a Holiday Home

YNM Real Estate
20 December 2021

Owning a holiday home is part of the Australian property dream. However, when considering such a purchase, it is important to consider the financial and tenant management aspects fully.

There are several benefits to owning a holiday home:

  • Rent free holidays
  • Potential profit/offset costs from renting out to tenants
  • Possible retirement home
  • Property value appreciation
  • Tax advantages

However, along with the abovementioned benefits, you also need to consider some practical aspects.


You will be maintaining a second home – this means double your running and maintenance costs – water, electricity, council rates, inspections, land tax and insurance. You will also need to fund any unforeseen expenses or contingencies that are not covered by insurance - keep a buffer to deal with unforeseen costs

Tenant management

Should you wish to let your property out, it would be a good idea to retain a real estate agent to advertise and let the property.

The property will need regular maintenance to keep it up to standard and attract tenants – the annual maintenance cost for a rental property is estimated at 4-5% of the rental income received, and the cost of property management can be as high as 15% of the rental income.

If you want the holiday home for lifestyle purposes and not only an investment, the times that you may want to use the holiday house are most likely high demand periods for potential tenants – you will need to balance personal use with generating rental income.


When considering a holiday home purchase, research the location to understand property prices and growth, average rental yields, land tax and other government charges.

Look at the surrounding infrastructure and services which could provide for/support greater opportunity for stable occupancy rates between peak periods.

Holiday areas in close proximity (within a 2 hour drive) to major metropolitan areas will be in high demand due to their easy accessibility. Having said this, ensure that the area has suitable amenities such as restaurants and tourist attractions, and good transport links.

Need help with property management services in Sydney? Give us a call today!

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