Should you buy a holiday home?

Should you buy a holiday home? This is a question that we reviewed several times during and after our epic road trip. Albeit we quickly came to the conclusion that you shouldn’t. In most cases at least, let me explain.

Should you buy a holiday home?

Now that we had our final vacation outside the main peak vacation seasons, we need to get creative. Miss CF will turn 5 not to long from now and will have to go to school mandatorily. Only in exceptional circumstances can you get leave for your child outside the fixed school vacation periods. The fine if you take your kids out of school and get caught: up to €100/day! Not a good idea.

So what if you buy a holiday home? Would this give you a cheaper place to stay during the peak holiday seasons? What are the pro’s and con’s? Time to find out.

Should you buy a holiday home?
Should you buy a holiday home?

The Boundary Conditions

As with everything we evaluate on this blog, we define the boundary limits first. In this case, we go for one (French) example with the following assumptions:

  • Suitable for a group of 3-4 people (family)
  • Budget for a holiday home is €100.000-150.000 (yes, that’s a lot of money)
  • Paid in cash!
  • Return on investment is 6% on above noted amounts when invested
  • Time to travel each year 3 weeks (21 days)
  • Property tax (1.2%) for the selected property
  • 8% transfer taxes (rough estimate)
  • Maintenance cost 2,5% of property value (all inclusive, including reservations)
  • Property price inflation: 2% per year

The Property

After watchin “Escape to the continent” the last few weeks on Netflix, I decided to look for a cheap but special property. This is what I found:

It’s a 41 cottage/fishing hut, unconnected to the grid, in the Dordogne in France. It comes with 3.3Ha (!) of land and it’s on lake (you have 3 lakes actually). Oh, and it has a 5.000m² (0.5Ha) Christmas tree forest How cool is that?

The price for all this? Just €114.450!

Oh, for future references (in case the property get’s sold), you can download the spec sheet here: French property with lake

Operating Expenses

Ok, let’s see how much this property is costing you on a yearly basis. Based on the assumption above, you’d get the following:

  • Total purchase price (incl. transfer taxes): €126.606 = lost opportunity costs = €7.416
  • Maintenance costs: €3.090
  • Utilities (gas use only, estimate): €150
  • Garbage/waste removal (estimate): €30
  • Property taxes: €1.483
  • Insurance (rough estimate): €300
  • Property value adjustment: -€2.472

Based on the above this vacation home would “cost” you €9.997 per year. Cash-flow wise it would only be about €3.000 per year (assuming 35% of the maintenance costs is actually spend every year). Based on the 21 days per year of vacation time, that would mean €474/day and €142/day in cash-flow costs. That’s a lot of money!

Obviously if you can stay longer (i.e. during FIRE), the costs per night would go down rather quickly. It’s actually not an expensive place to enjoy your retired life. Other things you could consider is to rent it out when you are not there. But you likely need a local someone to help you (cleaning, check-in/out, maintenance, etc.).

Extra Holiday Home Income

Ok, so you decide the balance the property expenses with some rental income. Based on an Airbnb search (see also next section) a property like this should fetch about €60 per night. Let’s say that you can rent this out about 30% of the year (this place not for everyone and in winter it might not be interesting). This would bring in about €6.570.

Let’s assume that this is paid by 30 different guests (average stay of about 3-4 days/group) and each check-in/out and cleaning would be €30. You would also have more garbage removal, say €150. And more maintenance due to wear and tear, say €500/year. Total expenses would be about €1.550.

Net profit on the rental would be about €5.020.

In this scenario the place is “only” costing you about €4.977 per year and is actually making your cash-flow positive! By a surprising €2.020 per year.

New expenses for your holiday of 21 days: 237/night. Ouch…..still expensive.

Vacation costs

If you go on holiday in the summer season for 3 weeks, in a similar area and sized property, you are looking at about €40-75 per night (based on Airbnb search). Let’s take €60 here for argument sake (including booking fees). The costs for the holiday (travel to site, food and attractions not included) for 21 days would only be €1.260! Seems like a no brainer to me.


Obviously having your own place is not financially interesting if you don’t rent it out. Heck, even when you rent it out it’s still not financially interesting (albeit cash-flow positive perhaps). For personal use a couple weeks per year, you are better off renting a place for that time. Looking at the lost opportunity costs of €7.416, that’s one heck of a holiday! We actually spent less during our 9 week road trip (post to follow on that too)!

There are some good things about having your own spot. You can make sure its outfitted to your liking, have your own personal stuff there and you can avoid other tourists. It certainly seems to be a quiet place. You are also free to come and go as you like, but at a high cost for sure!

The down side, besides the money, is that you always need to go to the same location. And in this case, the location is about a 1.000km from the Netherlands. You can’t really “hop” over for the weekend, you actually do have to plan your trips.

We made many more calculations like this and made the same conclusion over and over again. So we will not buy a holiday home now of in the future.


How about you? Is a holiday property something for you? 




  1. You know, I’ve never understood why people buy these places. I’ve had friends that buy property out in the country and a few buy cabins in the woods. They’re out at these properties doing maintenance every couple of months (which sounds like a lot of work) and it doesn’t sound like fun.

    I’ve never understood why they do it. Beside the financial side, it just sounds boring to go to the same place over and over again.

    1. Completely agree with you Mr Tako, the idea that you have to go to the same place for “20 years” does not seem very appealing! Not withstanding the extra maintenance and costs for the property.

  2. Good you did these calculations, it confirms my gut feeling that holiday homes are not a smart investment. But I can still dream of one in The Netherlands, to get away from the city on frequent weekend trips.

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