Buying a vacation home is an excellent way to invest your money wisely as well as to enjoy your own place under the sun. If you (partially) rent out your second home, you can also get a nice return on it. If you have made or want to make an investment, you are naturally curious about the possible returns. We have listed the various possibilities.

Net return on your vacation home

To determine the return of a vacation home, you can use the following calculation:

• Reduce the rental income by the costs of the rental organization and/or the vacation park.
• Divide this amount by the total investment (excluding VAT).
• The result is the net return.

Variable vs. guaranteed return

Sometimes there is a forecast or variable return. This means that after deducting all fixed costs, the seller delivers the return to you each month. Thus, there is no fixed or guaranteed return. Since rental income varies monthly (in pre-season, main season and post-season) your income also fluctuates each month.

With a variable return you have no certainty about your income, but with a guaranteed return you do. Then again, a downside to this is that you can’t enjoy the rising demand for overnight stays since you’re handling a fixed amount.

Minimum guaranteed return

Some rental organizations and vacation parks work with a “lower limit return” or “minimum guaranteed return. The agreed costs are paid by the park and you receive a guaranteed amount each month. The percentage of this is around 3 to 4%. At the end of the year, the actual returns are reviewed. After offsetting against the amount you have already received, the remaining returns are transferred. In fact, this is the best return formula, provided everything is ready and clear on paper.

Note that the return is not calculated based on an amount including VAT. VAT refund is a nice bonus. However, it is not a return on your assets, even if some real estate agents claim it is. Make sure you are dealing with a reliable real estate agent who will guide you in the best possible way when buying your second home.