Picture this: waking up in a snug mountain cabin or sipping your morning coffee in a beachfront hideaway — all in a holiday home that’s truly yours. Bliss, right?

Whether you’re craving a sea change, a tree change, or simply a peaceful spot to unplug, buying a holiday home can be a great way to grow your property portfolio while creating your own personal escape.

Before you make the leap, here are some key considerations to keep in mind.

Plan How You’ll Use It

Start by deciding how frequently you expect to use the property. Your balance between personal stays and short-term rentals will influence both your financial position and expected returns.

Remember: peak travel seasons — like summer for coastal areas — generally deliver the strongest rental income. But renting out during these high-demand periods may mean giving up your own holiday time.

It’s also worth researching whether holiday homes in your chosen area rent mainly in peak season or throughout the year, as this will affect your cash flow and planning.

Do a Deep Dive Into the Market

Just like any property purchase, thorough research is essential.

Ask yourself: What’s the supply and demand like for holiday rentals in the area? How strong is the local tourism scene? Will you depend heavily on seasonal visitors and if so, how will you handle quieter periods?

Look into long-term growth indicators as well. Choose areas with access to lifestyle amenities like cafés, shops and public transport. Also check for any upcoming infrastructure improvements that might boost capital growth.

Understand Local Laws and Regulations

Short-term rental rules differ from one region to another, so it’s important to familiarise yourself with the local requirements.

Some locations may limit short-term holiday letting, require registration, or enforce rules around how long an owner can stay in their own property. Local councils may also impose regulations relating to fire safety, noise, parking or overcrowding.

Additional charges can apply too. For instance, Victoria imposes a 7.5% levy on stays shorter than 28 days.

The key takeaway? Know the rules before you buy.

Be Clear on the Financial Commitments

Owning a holiday home comes with ongoing expenses such as:

• Mortgage repayments
• Council rates
• Home and public liability insurance
• Cleaning and maintenance costs

Also consider the tax implications and speak with your accountant or financial adviser so you’re clear on what to expect.

Some points to think about:

• Tax deductions: You can claim eligible expenses related to earning rental income — but only for the periods the property is rented or genuinely available to rent (see the ATO’s holiday homes guidance).
• Negative gearing: If the costs of the property outweigh the income, you may be able to offset the loss against your other income.
• Capital gains tax: You may need to pay CGT when selling the property if it has increased in value. Properties held for more than 12 months may qualify for the 50% CGT discount.

Stamp duty and land tax: These will vary depending on the state or territory.

Ready to Get Started?

If you’re ready to turn your holiday home dream into reality, we’re here to help guide your next steps.

Reach out today and let’s talk about making your ideal getaway a part of your future.