Buying a holiday home: 7 things to consider

A holiday home is for many the ultimate dream. A cottage by the lake, a croft in the forest, or a house by the coast where the family gathers summers. But a holiday-home purchase is no ordinary home purchase in smaller format. The finances work differently, costs run all year even when the house stands empty, and legal and practical traps exist that never appear with a city flat.

This guide goes through seven things to control before striking. Go through them before falling for the view. Because a summer day easily falls for something turning heavy and pricey the rest of the year.

1. Financing: count on tougher terms

What first surprises many is that a holiday home costs more to borrow for than a permanent home. Banks see holiday homes as bigger risk: often the first house sold in worse times, and harder to value. So they set tougher demands. Expect a lower loan-to-value, meaning a bigger down payment than the minimums for an ordinary home, and often a slightly higher rate.

Count also on some banks restricting holiday homes in remoter locations, or houses lacking winter standard. Talk to the bank early and get the answer in black and white before bidding, so you know exactly how big a down payment is needed and what the loan actually costs you. Starting from ordinary-home terms is a classic misstep.

2. Running costs run all year

A house used only weeks a year costs money every month. Property charge, insurance, waste collection, any leasehold ground rent, and power keeping the house frost-free in winter tick on whether you are there or not. Add upkeep and trips to and from the place, and yearly running often grows bigger than imagined facing the fine listing.

Ask to see the actual running costs before purchase and sum them for a whole year. A cheap cottage with pricey heating, a long road and deferred upkeep can over time cost more than a pricier well-kept house. Calculate the total, not just the purchase price.

3. Road, water, sewage, power and easements

In the countryside, what is obvious in town suddenly turns into questions to sort out. How do you reach the house: on a public road, or a private road run and paid by a road association you join? What water exists: municipal, private well, or shared? How does sewage look, meeting today’s demands, or does a pricey order to fix an old system wait? Is power connected, and in what shape?

Extra important are easements. An easement gives a property the right to use another’s land for road, well or sewage, say. Many holiday homes depend on easements to have road or water at all. Check they exist registered and valid, so you do not buy a house where the right to drive up or draw water rests on a spoken deal with a neighbour. Ask for documentation and, at the slightest doubt, have a lawyer eye it.

4. Shore protection and building permits

Dreaming of lake views or coastal spots, you must know shore protection (strandskydd). As a main rule, protection runs 100 metres from the shoreline, in places extended up to 300 metres. Inside that zone, what you may build, extend or change is strongly limited. That covers not just new houses. Jetties, sheds, fences, and turning land into private plots often count too.

So do not think you freely extend the cottage, add a guest house, or build a jetty just because you own the land. Find out what is actually allowed at the municipality before buying, especially if part of your plan builds on developing the house. Also check that what already stands on the plot holds a building permit. Illegal building becomes your problem the day you own the house, and can cost dearly to demolish or permit retroactively.

5. Insurance and upkeep in absence

A holiday home stands empty most of the year, changing both risk and insurance. Holiday-home insurance often carries special conditions: demands on how the house is supervised, rules on heating to avoid frost damage, sometimes limits on theft with the house unwatched. Read the conditions carefully so you know what truly applies if something happens while you are away.

Absence also sets upkeep demands. Frost-burst pipes, damp and mould, leaking roofs, and invading pests are problems growing big before you discover them next visit. Many solve it with a neighbour watching or a service minding the house. Carry that in your calculation, both the cost and the trouble of keeping a house in shape from afar.

6. Letting and tax on rental income

Many count on letting the holiday home part of the year to earn a bit. That often works fine. But learn the rules before building calculations on rental income. Letting your private home, you may make a standard deduction on the income yearly, with what exceeds it taxed as capital income. The exact standard-deduction level shifts over time, so check current rules with Skatteverket or an adviser.

Note letting means wear and administration, with some municipalities or areas limiting short-term letting. Rental income can absolutely help carry the house, but never build the whole deal on it covering running costs. Calculate conservatively, seeing any income as a bonus, not the calculation’s base.

7. Location and future sellability

Just like ordinary home purchases, location is the value driver weighing heaviest, unchangeable by you. For holiday homes it means nearness to water, transport and services, but also how easily the house is reached from where you actually live. A house taking five hours to reach easily becomes one rarely used, and hard to sell for the same reason when moving on.

Think at purchase already about sellability. Odd location, bad road, tricky sewage, no winter standard: what is hard to sell buying is often hard to sell the day you want rid of it. A well-kept house in a wanted, reachable location holds value best, even when the holiday-home market cools. And the holiday-home market swings more than the permanent-home market, since a holiday home is something to skip when finances tighten.

On SökHem you instead place a buying brief with your criteria and budget, and the matching actively looks for fitting sellers, even ones who have not listed their holiday home publicly yet. Then you get to do the homework calmly: check road and water, read easements, settle shore protection and permits, and calculate a whole year’s running, before deciding. And contacting a seller early, you often skip the bidding otherwise driving up prices on precisely the most wanted spots.