Confessions of a Second Home Landlord: Getting Started

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Eleven-bedroom $1.75 million Louis XIII chateau outside Paris, your second home?

One thing many one-home homeowners have in common is a desire to have another one. I think it’s like the “how hard could one more be” ethos of parents. I don’t have kids, but I have owned a second home for nearly 20 years and there are things to consider and stories to tell.

Picking the right property is the first stop. If you think location, location, location matters in a primary home, it goes double for a second home. Why?  Because most of us will need to put that home to work generating income when we’re not enjoying its charms. A few bucks profit at sale time wouldn’t go amiss either. Because of this, finding a location that works both for your personal desires but also your financial goals of revenue generation and asset appreciation.

To further those goals, a second home must be in an area with a large pool of vacation or full-time tenants and also an area of rising prices. That’s because the market for second homes is no longer an infrequently used family cabin in the woods with sheets draped over the furniture most of the year.

According to Christie’s Real Estate’s Luxury Defined 2018 report, older Millennials (up to 37 years old) are comfortable harnessing the sharing/gig economy. As a result, they’re purchasing slightly more expensive second homes than they could typically afford precisely because they expect to rent it out when they’re not there to offset costs. Even those not stretching themselves financially want a second home to work.

2 bedroom South Beach condo perfect for vibrant beach vacation seekers

Action Packed or Action Adjacent

Millennials are living more urban lives generally, and this translates into a desire for second homes near vibrant entertainment and resort districts. But many Boomers are also seeking more urban experiences. Being able to tap multiple rental pools is the formula for a successful rental property. Sure, there’s a whole market out there for “get away from it all” destinations, but even then, you’d want it near civilization in order to attract a steady stream of tenants.

The corporate definition of “work” is changing for many who are allowed to work remotely (increasing the pool of potential tenants). If you can work from anywhere, why not hang out for a few months a year at the beach, mountains or a favorite city?

A friend of mine is a translator for various banks and government finance departments. He spends the winter in Hawaii, the spring and autumn in Paris, and the summer in Vancouver. Many years ago I worked with a woman who had also relocated multiple times and with each move, kept the house and rented it out, forming a little real estate empire for retirement.

Narrowing Down The Right Location

Easy. Where do you want to live at least part time? This can be part of longer-term retirement planning or a simple getaway location. Make sure you’ve visited the area extensively for long periods of time (don’t just stick a pin in a map). Unless this is a purely financial move, you need to know you’ll be comfortable in a second location. You’d be surprised at the number of people who visit a place for a week and think they’ll love it forever. Take your time, you want to get this right.

Hawaii is a perfect example. Many second home buyers think the tropical breezes of Maui, Kauai, or Hawaii Island will suit their need for solitude. But in a few years they realize they’re bored stiff on the outer islands, selling-up and moving to Oahu and the civilization of Honolulu and Waikiki. The outer islands are fine rental areas, but if having a rental property is a stop-gap until a full-time retirement location, you’ll likely need more than palm trees and endless golf.

I selected my rental because, before I bought, I’d rented in the building several times and was comfortable with its workings. In those early internet days, I spoke extensively with a few local Realtors about the economics and viability of owning a unit in the building.  Research is your friend.

Maybe you’ve narrowed it down to a few places. From there, look at websites like (vacation rental by owner) or Airbnb to see what types of rentals others are offering and how much they’re charging. Look at their booking calendars and see how full they are.

Compare that information with local real estate listings and narrow locations (a city is a large place and micro-targeting neighborhoods is worth the time). Then start looking at transportation and identify public transportation stops and stations (if it’s a public transit city like New York or Paris). If it’s a car town, note parking availability in listings.  Also note proximity to shopping, restaurants and nightlife.

This should narrow your list further. Now it’s time to create a spreadsheet that tracks selling prices for properties and what similar places are asking for rent. From there figure out running costs. Estimate taxes, mortgage payments, HOA dues (if a condo), management fees, utilities, insurance, etc.  Ultimately you want to understand how much revenue a property can bring in, balanced against its running costs.  What do the margins look like?  Is the property profitable or is the mix of tenant revenue and your own kick-in enough to make the math work for your budget.

In the first few years of second homeownership, my property cost me about $5,000 a year on top of the rent I was able to generate. Over time, as the rental market increased more than my costs, I eventually break even most years. While a profit would be great, just owning a second home that breaks-even is wonderful.

Of course, it’s important to understand the rental season. Don’t assume you have a full year of rentability. Some resort towns only have one season (e.g. east coast, summer rentals or ski destinations) and so three-ish months will be the bulk of your rental opportunity. Selecting locations with wider seasonal appeal may generate more income, but not necessarily.  One friend with an east coast beach home was able to generate as much rent in a week as I could in a month.

I still have the spreadsheets I built all those years ago.

Might be stunning after a renovation

Turnkey or Renovate

If you’ve read my main column on, you know I’m a big renovator. Mostly it’s a budget thing (I’m too poor to afford nice things unless I do the work) but I also like things my way. Renovating a second home adds the dimension of distance to managing renovation project or taking the time to be present. Be really honest here before proceeding.

Early on, when I renovated my kitchen and bathroom, I flew over to meet the contractors who were supposed to have begun the day before with demolition. I arrived to find they’d quit to take a better-paying project. I was spending my two week vacation there and had a tenant moving in the following month – no room for error. Luckily all the materials had been ordered and were ready for pick-up.

I managed to scrounge up two “Jacks of all trades” to help me. Between the three of us we remodeled the kitchen and bathroom within the two weeks. During those weeks, I violated multiple building rules (working and bringing in materials after hours mostly). I ultimately became good friends with the building manager because I was honest about my situation and was too poor to just throw money at it.

The day I flew home, the granite guys were measuring for the countertops. Two weeks later they installed the counters and my next tenant moved in days after that. I didn’t see the final remodel until I returned nearly a year later.

Not what I expected, but it got done.

If renovating isn’t for you, fret not. Especially in hot destinations, there are agents who specialize in turnkey properties or who can help locate the resources you need to renovate. Either way, condition of your second home effects how much you pay for it and what you can charge in rent.

In part two, I’ll explore the fun of being a landlord and little tips I’ve learned along the way.


Remember: When I’m not stirring up trouble in Dallas, Texas or Honolulu, Hawaii for and, I’m off scouting interesting locations for a second home.  In 2016 and 2017, the National Association of Real Estate Editors recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards. If you’re a Realtor with second home clients who’d like me to feature their journey, shoot me an email Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.


Reader Interactions


  1. Candy Evans says

    Jon and I actually bonded over our mutual love of real estate and vacation homes/second homes. I grew up in suburban Chicago listening to bragging kids who went to the Wisconsin Dells in the summer. Or Michigan. Or Minnesota. Finally, my parents took me and I loved every second. Then I married a man whose grandfather was kind enough to invest his fortune in his future family by investing in a beach house on the coast of Maine where we have enjoyed significant moments of our lives. I believe most families feel this way. We have our land in the Hill Country and I am itching to build there while I am also gaga over Park City and Lake Tahoe. Those are the two places I would live besides Dallas. Love Hawaii, but so far… not so far from my kids in Cali, though. That’s the hard part: trying to find the place where everyone can gather!