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Buying a second home

How do financing and taxes work when it isn't my main home?

Step 4 of 6

Will the rental income actually cover anything?

The answer

Run the numbers conservatively: realistic nightly rates, 50–60% occupancy rather than the listing's best month, and full expenses including management at 20–30% of revenue, cleaning, utilities, supplies, insurance and repairs. If the property only works at peak-season occupancy year-round, it doesn't work.

Most second homes don't fully pay for themselves. That's fine if you know it going in; it's a shock if you didn't.

How long
Most people spend about a week here.
What to do0 of 5 done
  • How to: Have real comparable rental data

    Pull real rates and occupancy for similar rentals nearby

  • How to: Modeled a conservative year

    Model a conservative year: below-average occupancy and rates

  • How to: Listed every expense

    List every expense, including management, cleaning and turnover

  • How to: Decided on management

    Decide whether you'll self-manage or hire it out

  • How to: Know my net vs. carrying cost

    Compare the net against your carrying cost honestly

Go deeper
What people wish they'd known
  • Using best-case occupancy. Model the average, then plan for worse.
  • Forgetting the small costs. Cleaning, linens, supplies and platform fees add up to real money.
  • Planning to self-manage from three hours away. Most owners hand it off within a year.

From the Thrive team

  • A property manager's fee buys you guest communication, cleaners and a 2 a.m. phone call you don't have to take.
The next thing people ask

How do I buy well from a distance?

Go to step 5

Questions you'll probably have

Questions about your situation?

Elliott or Ashley will answer, usually within one business day. No pressure, no pitch.

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