After we’ve debated the short-term lease pros and cons as an overall investment, we were wondering: but what if the real estate investor in question actually wants that to be a second home and not just an investment?
Let us get deeper into that scenario: say things are going well for you, and you’ve made up your mind on buying a second home; a place where – from time to time – you go and live for a while for a change of scenery. The first couple of years you are there enjoying it to the fullest; but then… life happens. One time you can’t coordinate your PTOs with your spouse’s. The other year, your kids are now “too cool” to go there; they want to go someplace else. You start to realize that sweet second home living won’t be happening every year at the same location.
You won’t sell it, right? I mean, you love that house! You don’t really need to sell it; you’ve got other investments. You’re not relying on it to bring in money, and to be honest, you don’t have time to go there and enjoy it; let alone sell it. But just shrugging it off is equally not very smart; you’re sitting on a real estate property! That’s money going to waste, and that’s a shame.
In this article, we will discuss the best options when buying a second home to help bring in revenue even when you are not using it.
Airbnb accommodation is really popular right now; in fact, many people believe airbnb renting is better than traditional renting. Yes, in many cases – especially when the property is an investment and nothing besides - that is the truth. But there’s so much to consider here… if the property is meant to be your second home – meaning from time to time you want to spend some extended time there – then the use of it as an airbnb rental property might not be the most interesting choice.
We believe there are a few things you need to consider when buying a second home to turn into an airbnb rental property:
Being true to the location, location, location adage, the real estate market on which your proposed airbnb rental property is located plays a big part on evaluating if it’s the best use for your second home or not. See, if your home-away-from-home is in a city like New York that has a lot of tourists coming in no matter the time of year, the use of it as an airbnb rental property is very interesting. And why is that? Because of the seasonality of use; if your airbnb rental property is in a real estate market that is dependent on seasons – like ski places are of winter and beach places are of summer – it won’t be such a good idea, because the “primetime” of your property will be exactly the season where you could enjoy it yourself. And, when that’s true, the type of property comes also into play. Think about it: in a city like New York, a house makes no sense. The tenant is looking to get into the city life; to get close to the buzz. A house in New York will likely be on the outskirts of the city. Which is great in its own way, but not as attractive as even a small chic studio right in the heart of the city.
The 2026 FIFA World Cup will bring a lot of great opportunities to airbnb accommodations owners. If you live in one of the cities that will host games, you will have a superb opportunity to make a lot of money. Hey, if you don’t care about soccer and having a good time, you could even decide to travel a bit and leave your apartment vacant to profit a bit! With the influx of people coming in, supply and demand, you’ll likely, at least, get your expensive travel paid for by doing that.
Another thing that weighs down on it is the distance between your second home and your main residence. Say you live in California; you’re too far away from New York to run an airbnb rental property. Is it doable? Yes, you can set companies to manage the property – or assemble a team to do it – on your behalf. But is it ideal? Far from it. With the high-intensity rotation of tenants coming in and out of your airbnb apartment, it’s best to be close by so you can see if the work is being done and, should any emergence arrive, you are close enough to be there and solve it.
When using your second home as a vacation rental, the road to success is different. Here, the seasonality is the means to profit: the year you decide not to go, you can turn the second home into a vacation rental and rent it out to a family for nice bucks. If you’re thinking “but why will I buy a beach house, one of the best vacation destinations if I rent it every summer?!”, well, you can (i) learn to enjoy the city in its off-season – some people will even tell you that the off-season is the best because of fewer crowds, less intense weather and different activities – and (ii) you can always block the very beginning or the very ending of the season so you can get a week of fun in your vacation rental. We think the ending is the best idea because you will be able to evaluate possible damages left by the tenant and get to fixing them.
And during the rest of the year, you can be flexible to accept offers of rent – should they come – or go there yourself for off-season or holidays PTO. For instance, let’s imagine two scenarios:
Someone asks you to rent your ski lodge log cabin second home outside of winter. That’s a great opportunity, as you were not counting on that. If you manage to charge a decent amount, you can just enjoy the winter there, as it earned a good amount of money when you were not expecting. Almost as if the off-season vacation rental paid for your own vacation time. And if it doesn’t pay that well… still a win; you earned money when you were not supposed to.
Vacation rentals are the opposite of an airbnb rental property when it comes to distance from your main residence. You have to be away from home; otherwise it’s not a vacation, right? At least in the “feel” of a place: you can live in New York and have a vacation home in the Hamptons; it’s close in distance, but very distant when it comes to landscape. It’s adamant, however, when choosing the vacation rentals, to have someone (or a company) you can trust to manage the property for you. Someone to clean it before and after guests leave, to take care of the gardening (when applicable) and even market it. You can use the web – even airbnb – to market it, but you’ll need to do better than that because with vacation rentals you’re not looking for a heavy-rotation of tenants, but steady one-time tenants of 3 to 6 months, if possible. That’s so much true that there is a real estate agent niche for vacation homes; vacation rentals are the “classic” short-lease term situation, if you will.
To us, a log cabin is the middle of the road between an airbnb rental property and a vacation rental. Why is that? Well, a log cabin is considered a novelty home. Usually near the mountains and cold places, people are attracted to it to spend a while – skiing or enjoying the nature – in such an unique sort of dwelling. Because it’s not necessarily big, you can have a log cabin within the premises of your main residence – if you leave in a mountainous/woodsy place like the one we just mentioned – and airbnb-it. You can use it yourself anytime you don’t have guests, but also serve it as a short-term lease vacation rental to them.
Those are three interesting ways to go about when buying a second home. In the end, it will all depend on your periodicity of travels to the second home (which, will, in turn, depend on the distance from the main residence, we’re sure) and the type of property your second home is. One thing is certain: there’s nothing more fun than enjoying a home-away-from-home when you know that while you’re out, that property is making you money and you are barely moving a finger. It's enjoying the best of both worlds of the real estate industry: the housing and the revenues it provides.