Making that holiday home a reality

Many of us have dreamed of owning a holiday home, creating an escape from the hustle and bustle of city life. Holiday homes are great for bringing family and friends together and making memories. Whether it’s a beach house or a place in the bush, it’s a place to unwind and relax. It can also be used to generate income as a short-term rental property when you’re not using it.  

If this is on your bucket list, then here are some things you need to keep in mind.

Making that holiday home a reality

Lead with your head

Firstly, plan how you’re going to use the property and finance it. For example, if you want somewhere to escape to every weekend, can you realistically afford to buy somewhere a few hours away and keep it just for family and friends? Would you consider buying with other family members? Or would you prefer to rent it out to cover costs, and how many weeks rental would you need to rent it to become profitable?

Most holiday homes charge peak rental for school holidays, the summer break or the snow season – times when you probably want to stay there yourself. So, be honest about the trade-offs you’re willing to make.

If you would need to let your property at least part of the time, then location is key. The home will need to be easy to maintain as well as have the amenities and aesthetics that paying guests want. Including things like a BBQ, pool, ceiling fans or heating and comfortable furnishings. All of these can bump up what a rent-worthy property costs to set up and the time you need to commit to it. It’s a good idea to check out other rentals in your preferred areas to see what successful holiday lets offer and what fees they charge.

Holiday home finance is different

Lenders and the ATO view a holiday home as an investment property – whether or not you rent it out. Lenders want a bigger deposit and higher interest rate than for an owner-occupied property. While you may be able to use the equity you have in your main home for the deposit, lenders still want to see that you can service the loan. Some take proven short-term rental income from the property into account. Otherwise, they only accept long-term lease rental projections. We can review your circumstances and prepare an investment plan to help identify properties that may have a greater chance of being approved by lenders.

You can get an idea of what properties earn on sites such as Airbnb’s AirDNA.i

While it’s true short-term holiday lets could earn much higher rents, the income may not be year-round, even though the property’s ongoing expenses and upkeep are. These include extras like specialised landlord insurance, property listing website costs, regular maintenance, cleaning, utilities and the replacement of household items such as towels and kitchen items. You’ll also need to consider the current council rules for short-term lets. In some areas there are restrictions such as the number of weeks a property can be let. These rules can change and it’s the landlord’s responsibility to stay up-to-date.

Tax implications

The good news is that you can claim property-related costs as a tax deduction. If you’re only renting for part of the year, then the deductions are for the rentable period only. And, if you’re thinking of buying the property through your Self-Managed Super Fund, remember that it can only be used for maximum income generation and not family use. It’s a good idea to check with the ATO website or your accountant about the tax rules around rental income and any capital gains you’d have to pay if you sell.ii

While a holiday home can become your own piece of paradise and create many happy memories, organising how to finance it takes preparation.

Please get in touch if you’d like to chat through your options so we can start getting things organised for a successful completion on your dream holiday home.



Important: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

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Authorised Representative 298494
Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

  • Certified Financial PlannerTM Professional
  • Diploma of Financial Planning

At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.