Apart from an attractive purchase price, there are two aspects that we consider important. The first aspect is the value a holiday home adds in the form of holiday pleasure, of the feeling of being able to get away from everyday worries and just being able to relax, adding quality to your personal and family life in your own little paradise. The second aspect is the value one can measure financially in the form of returns. Although this aspect is not the most important aspect for many, it is of course nice to know that a holiday home does not have to cost money but even can generate money in the form of rental income. If you can combine the financial value (return on investment) with this non-financial value (living pleasure), you can consider this a bonus. It is the financial aspect that we would like to show here.
When you invest in your cottage through renovation, you will receive more rental income. Not only because of a higher rental price, but also because renovated cottages are booked more often. Least as important benefit with renovation is, that one increases his living comfort and vacation pleasure. And renovation also adds value to your cottage, which of course provides an extra piece of capital if you were to sell. So, renovating your cottage pays off in many ways. For Swedish citizens there is even an extra reason to renovate, namely the ROT deduction, which gives you a 30% tax refund on all labor costs.
Please look at the calculations below, to see what the return on investment could be. We have made calculations for both A-houses (289,000 SEK), B-houses (319,000 SEK), C-houses (349,000 SEK) and D-houses (469,000 SEK).
Since we have changed the concept a little by reducing the selling price to 50% of the previous selling price, you pay the other 50% through a fixed “repayment” of 48 months via your rental income. So, you don’t have to pay the other 50%, but instead we keep your rental income for 48 months. It will be like an amortization, but without a loan, without interest! This means that the calculations on our website will be a little different, but generally returns will be at least as good as in current calculations. Then you can still choose to pay the original 100% price that we have included in our calculations and instead receive rental income from day one. You get to choose which option you like the most.
The value development of the house is not taken into account, but one may assume that the value of the house will increase if it is sold in 10 or 20 years from now. That will certainly be the case if one renovates and thus adds value to his cottage. This will give extra profit, which in that case will be an extra bonus.
Below are four calculations of costs, rental income and ROI: a calculation based on buying a cottage without renovating it and a calculation where you do a complete renovation. Just click on one of the below cottages to see the various calculations.
