Rare earth atoms exhibit several interesting properties, for example, large magnetic moments and luminescence. Introducing these atoms into a different matrix can lead to a material that shows multiple interesting effects. Holmium atoms were incorporated into an iron oxide nanoparticle and the concentration of the dopant atom was changed in order to determine its influence on the host crystal. Its magnetic and magneto-optical properties were investigated by vibrating sample magnetometry and Faraday rotation measurements. The luminescent characteristics of the material, in solution and incorporated in a polymer thin film, were probed by fluorescence experiments.