We first fell in love with Arniston about 30 years ago, and, like many families, we did what people often do when they find ‘their’ place — we started daydreaming. Could we ever own a home here? Would it be the ultimate family anchor, the place our sons would always return to, long after school holidays had become a distant memory? We contemplated the idea for years, and then for decades, because the truth is that a holiday home is not merely a property purchase; it is a long-term financial commitment that competes with every other goal you are trying to fund. We eventually bought our dream home in 2021 — roughly 25 years after we first started weighing up the possibility — and that long runway turned out to be our greatest advantage. It forced us to interrogate the decision properly. It also taught us something we now repeat to clients: the families who enjoy their holiday homes the most are those who buy them at the right time in their lives, with the right structure, and with a clear understanding of the ongoing costs.
A holiday home is a lifestyle asset first and an investment asset a distant second. Even if you intend renting it out, it is seldom a clean, predictable income-producing asset in the way a well-diversified investment portfolio can be. Property is lumpy, expensive to transact, and often emotionally “sticky,” which means it can be difficult to sell when your plans change. That is why a holiday home must earn its place in your financial plan, not simply in your heart. The best starting point is to treat it like a multi-year project rather than a once-off purchase: model the full cost of ownership, test your cashflow resilience, and make sure it strengthens — rather than weakens — your long-term plan.
The timing question: buying the dream at the wrong life stage can ruin it
Our biggest debate for years had very little to do with Arniston and everything to do with life logistics. When the boys were still in school, their weekends were packed with sports, extracurricular activities, and family commitments. We kept asking ourselves the uncomfortable but essential question: how would we realistically get there often enough to justify owning a home more than two hours from Cape Town? Holiday homes are at their most expensive when they are underused. If you can only go on long weekends and during peak-season school holidays, you may be paying year-round for an asset you only enjoy in short, high-pressure windows. In many cases, a long-term rental ‘trial’ is the most financially responsible way to test your assumptions. Renting forces honesty: you learn whether you will actually use the house in winter, whether the drive feels manageable on a Friday afternoon, whether the town still works when it is quiet and the weather is poor, and whether your family truly needs ownership or simply access.
In our case, the timing aligned when all three boys had finished school. With that chapter complete, we had far more flexibility to use the home regularly and spontaneously, which materially improved the lifestyle value. It also changed the economic reality, because we no longer had to ‘force’ the numbers to work through letting the property during the only periods we wanted to be there ourselves.
Price is only the beginning: the true cost of ownership is the deal-breaker
Most buyers focus on the purchase price and the bond repayment, but as planners we know that the real risk lies in the recurring costs: rates and taxes, levies, insurance, maintenance, security, utilities, connectivity, cleaning, linen replacement, garden services, pest control, and the steady drip of repairs that come with owning any property, particularly near the coast. It is easy to underestimate these costs because they do not arrive neatly once a month; they arrive unpredictably, and usually at the same time as another part of your life demands cash. The way to manage this is to create an annual holiday home operating budget and then add a maintenance reserve on top of it, rather than treating maintenance as an occasional irritation. If you finance the property, stress-test affordability at higher interest rates and assume at least one meaningful unplanned repair in the first two years. The goal is not to be pessimistic; it is to ensure that the dream house does not become a monthly source of financial tension.
Liquidity matters more than you think: the hidden opportunity cost
A second property can quietly drain flexibility because it often requires a large deposit and then ongoing costs that reduce your capacity to invest elsewhere. This is where many households feel the pinch without immediately connecting it to the holiday home decision: retirement contributions slow down, emergency reserves shrink, or short-term goals are funded with debt because cash flow is tighter than expected. In our view, you should only buy a holiday home if you can still maintain the non-negotiables of a healthy plan: a proper emergency fund, adequate risk cover, sustainable retirement funding, and enough liquidity for known goals over the next few years.
Distance and outsourcing: the further away it is, the more operational it becomes
Two hours from Cape Town sounds manageable — until you add the realities of maintenance and oversight. The further your holiday home is from your primary residence, the more you will outsource and the more you will rely on third parties for key tasks: cleaning, emergency call-outs, plumbing, security checks, and general upkeep. That is not a problem if you budget for it and build trusted relationships, but it becomes a problem if you assume you will ‘just do it yourself’ and then discover that life rarely cooperates. This is also where a holiday home starts behaving less like an asset and more like a small operational business, even if you have no intention of letting it out.
Coastal maintenance and security: price in the unglamorous realities upfront
Keep in mind that seaside homes come with a specific maintenance profile. Salt air accelerates corrosion, affects appliances and electronics, and increases wear on windows, tracks, hinges, balustrades, outdoor fixtures and fittings. Further, if the property will be unoccupied for stretches, security is not optional. It is essential to understand your insurance requirements (including conditions relating to unoccupied periods), and to budget for security hardware, monitoring, and response where necessary. We have found that the clients who remain happiest with their holiday homes over time are those who accept upfront that coastal ownership requires consistent maintenance, not occasional attention.
Rental income: Be realistic about net returns and the personal inconvenience factor
For years, one of our biggest questions was whether we would be prepared to rent the house out when we were not using it. While on paper, rental income can help offset costs, in practice, it is seasonal and operationally demanding. Importantly, you need to model net rental income, not the nightly rate, bearing in mind that agent commissions, management fees, cleaning, laundry, consumables, maintenance call-outs, and vacancy periods materially change the picture.
Tax and exit planning: A second property is not the same as your primary residence
Many buyers take comfort in the idea that ‘property always goes up’, although keep in mind that even if the property appreciates, the net benefit depends on the tax and transaction costs when you sell. A second property can attract capital gains tax on disposal, and the friction costs of selling property are meaningful. If you are relying on the holiday home’s future sale value to fund retirement, a downsize, or another long-term goal, your calculations should be done on an after-tax, after-cost basis, not on a headline market estimate. This is one of the most common planning gaps we see: clients mentally allocate value to the holiday home that may not be fully realisable when it matters.
Ownership structure: personal versus trust is an estate-planning decision, not a shortcut
It is common to hear, ‘We should buy it in a trust for the kids’ – which is sometimes appropriate, although sometimes an expensive complexity with limited benefit. A trust comes with administration, governance and potential tax implications, and it can also introduce family decision-making dynamics that need careful thought. The right ownership structure depends on your broader estate plan, your family realities, your long-term intention for the property, and whether you are trying to solve a real planning problem (such as protecting a family asset across generations) or simply following a popular narrative. If the goal is truly intergenerational enjoyment, the most important work is often not the structure itself, but the governance: who can use the home, how costs are shared, what happens if someone emigrates, and how disputes are resolved.
The question that matters most: will this home still fit your life in ten years?
A holiday home is at its best when it remains practical as life evolves. Consider how your needs may change: children leaving home, grandchildren arriving, ageing parents, shifting work flexibility, and your own retirement timeline. If you plan to retire there one day, think beyond sentiment and model real-life practicality: healthcare access, security, service reliability, and the day-to-day liveability of the home outside holiday mode. If you plan to keep it for future generations, consider whether the next generation will actually want the responsibility of a second home, especially if their lives are global and mobile.
Our Arniston story is, in many ways, a lesson in patience. We did not buy the moment we fell in love with the place; we bought when the timing was right for our family and the numbers were resilient enough for us to enjoy the home without compromising everything else we were building. A holiday home can be a remarkable source of family memory and restoration, but it should never come at the cost of financial freedom. When the decision is made deliberately — with proper modelling, realistic assumptions, and a clear long-term intention — the holiday home becomes what it is meant to be: a lifestyle asset that enriches your life without quietly weakening your balance sheet.
Have a great day.
Sue
