VICDOC Summer 2025 - Flipbook - Page 55
The classic Victorian holiday
The case for caution
home – a beach house on the
Mornington Peninsula or a
retreat on the Great Ocean
Road – is often top of that list.
But while the lifestyle benefits are clear,
is it a sound investment decision? Before
you buy, it's critical to dissect the pros
and cons.
The case for the getaway
But from a financial perspective, there
are typically significant downsides.
High Cost & Opportunity Cost: The
days of finding a ‘cheap’ beach shack
within a one-to-two-hour drive of
Melbourne are long gone. Realising the
dream requires a substantial mortgage.
For a busy professional, this raises a
key question of opportunity cost: could
that capital and borrowing capacity be
The most powerful argument for
deployed more effectively in an A-grade
a holiday home is, and always has
metropolitan asset?
been, lifestyle.
The Cost of Vacancy: Even the most
A Home-from-Home: A holiday property
active users are rarely at their holiday
becomes another place you can call
home for more than a fraction of the
home; one you can furnish to your liking
and fill with memories.
Unlimited Access: As an owner, you
can get away all year round – a fortnight
here, a week there, plus long weekends
Income Potential: Many owners mitigate
the holding costs by leasing the property
for short-term rentals. With peak weekly
rents for even modest homes reaching
four figures in popular areas, it’s possible
to make a significant impact on the
mortgage.
A Place to Retire: A holiday home can,
in time, morph into a primary residence
once the owners shift from full-time
work and, eventually, into retirement,
with the city home potentially sold to
year. Unless you are renting it out
constantly, the effective cost-per-visit
can far exceed simply leasing a luxury
property for the equivalent days, without
any of the burdens of ownership.
The Reality of Leasing: Leasing the
property to offset costs comes with
major trade-offs. You immediately
lose personal access during the most
desirable (and profitable) periods,
like summer and Easter. You also lose
the ‘home-from-home’ feeling; the
property must be kept in immaculate,
tenantable order, not left in a state of
casual holiday relaxation. Furthermore,
the costs of short-term leases are high,
with significant wear-and-tear from high
turnover.
help fund this new lifestyle.
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