Buying and Renting Your Vacation Home: Living the Dream or a Living Nightmare?

June 18, 2024



Dreaming of a sun-soaked beach house or a cozy mountain retreat? Investing in a vacation home can be your ticket to both personal relaxation and financial rewards. But before diving into the world of vacation property ownership, it’s important to consider the benefits and risks involved. In this guide, we’ll explore the allure and challenges of owning a vacation home, loan options for financing your home, consider the best platforms for renting it out, and discuss management options to ensure your investment pays off.


Financing Your Vacation Home


The good news is, yes, you can use a physician home loan to purchase a secondary vacation home, but there are some important factors to consider:


  1. Loan Program Specifications: 

Not all physician home loan programs allow for the purchase of a second home or vacation property. Some programs are designed specifically for primary residences. You will need to confirm with your lender whether their physician loan program includes options for secondary or vacation homes.


  1. Lender Requirements: 

Even if the loan program allows for secondary homes, lenders may have specific requirements or stipulations. These can include higher down payment requirements, stricter credit score thresholds, or proof of adequate income to cover both properties.


  1. Interest Rates and Terms: 

The terms for a physician home loan for a secondary property may differ from those for a primary residence. Interest rates might be slightly higher, and the loan terms may be less favorable compared to loans for primary homes.


  1. Loan Limits: 

Some physician loan programs have limits on the amount you can borrow. Ensure that the loan amount covers the cost of your vacation home while still meeting the lender’s criteria.


  1. Financial Stability: 

Ensure that you have a stable and sufficient income to manage the mortgage payments, maintenance, and any other costs associated with owning a second home.


Steps to Take


  1. Research Lenders:  

Look for lenders that offer physician loans for secondary properties. Compare their terms, interest rates, and specific requirements.


  1. Pre-Approval: 

Get pre-approved for a loan to understand how much you can borrow. This also strengthens your position when making an offer on a vacation home.


  1. Budget Carefully: 

Include all potential costs in your budget, such as maintenance, property management (if you plan to rent it out), utilities, insurance, and property taxes.


  1. Consult Professionals: 

Engage with financial advisors and real estate professionals like Curbside <link:> who have experience with physician loans and secondary properties. Their expertise can help you navigate the process and make informed decisions.


Potential Benefits of Owning a Vacation Home


  • Income Generation

When you’re not using it, your vacation home can work for you. Renting it out can create a steady stream of income, helping to cover mortgage payments, property taxes, and maintenance costs. Plus, with the rise of vacation rental platforms, it’s easier than ever to find renters.


  • Appreciation Potential:

Real estate typically appreciates over time. A strategically chosen vacation property can increase in value, offering significant long-term financial gains.


  • Personal Escape:

Owning a vacation home means you always have aguaranteed spot to unwind. Whether it’s a beach bungalow or a ski chalet, having a personal retreat can greatly enhance your quality of life.


  •  Tax Deductions:

As a rental property owner, you can enjoy tax benefits such as deductions on mortgage interest, property taxes, operating expenses, depreciation, and repairs. This can make your investment even more lucrative.


  •  Portfolio Diversification:

Adding real estate to your investment portfolio can reduce overall risk. Unlike stocks or bonds, real estate offers tangible value and can provide a stable return on investment.


 The Risks to Consider


  • High Initial Investment:

Purchasing a vacation home requires a substantial upfront investment. This includes the down payment, closing costs, and potentially higher interest rates compared to primary residences. Make sure you’re financially prepared for this commitment.


  •  Market Volatility:

The vacation rental market can be unpredictable. Economic downturns, travel restrictions, and seasonal fluctuations can all impact your rental income. It’s important to have a financial cushion to weather these ups and downs.


  •  Maintenance and Management Costs:

Owning a vacation home comes with ongoing expenses. From routine maintenance to unexpected repairs, these costs can add up. Additionally, if you’re not living nearby, you might need to hire a property manager, which will eat into your profits.


  • Occupancy Rates:

High occupancy rates are not guaranteed. The income from renting may be unpredictable and can vary significantly depending on location, season, and competition. Ensuring your property stands out to potential renters is key.


  • Regulatory Issues:

Local regulations regarding short-term rentals can be strict and change frequently. Non-compliance can lead to fines or legal issues. Stay informed about local laws and ensure your property adheres to all regulations.


Maximizing Your Investment: Renting Out Your Vacation Home



Airbnb is the go-to platform for short-term rentals, known for its user-friendly interface and vast audience. As a host, you can set your own rates, house rules, and availability, making it a flexible option for renting out your vacation home.



Vrbo (Vacation Rentals by Owner) focuses on whole-home rentals, appealing to families and groups looking for longer stays. It’s a great platform to showcase the unique features of your property. <>:

Although primarily known for hotel bookings, also offers vacation rental listings. It provides access to a large, global audience, potentially increasing your rental income.



Now part of Vrbo, HomeAway specializes in vacation rentals, catering to families and long-term stays. It’s another excellent platform to consider for renting out your property.


Local Vacation Rental Agencies:

Many regions have local agencies that specialize in vacation rentals. These agencies can handle bookings, marketing, and guest services, often with a more personalized touch. They can also provide valuable insights into local market trends.


Efficient Property Management



Managing your property yourself can save on fees but requires a significant time investment. You’ll need to handle bookings, guest communications, cleaning, maintenance, and marketing. This approach is best if you live nearby and have the time to dedicate to managing your property.


Full-Service Management Companies:

These companies take care of everything, from marketing and bookings to guest services and maintenance. While they charge higher fees (typically 20-30% of rental income), they offer convenience and peace of mind, especially for busy owners or those living far away.


Hybrid Management:

Some owners prefer a hybrid approach, managing certain aspects themselves (like guest communication) while outsourcing cleaning and maintenance. This can save costs while still alleviating some of the workload.



Platforms like Airbnb offer co-hosting options, where another individual helps manage the property in exchange for a share of the income. This can be a flexible and cost-effective management solution, especially for new hosts.




Investing in a vacation home and renting it out can be a rewarding venture, offering both financial returns and a personal sanctuary. However, it’s essential to weigh the benefits against the risks and make informed decisions. By consulting with real estate professionals like Curbside, choosing the right rental platforms and management strategies, you can maximize your investment and enjoy the best of both worlds. 


So, whether you’re dreaming of a beach house, a mountain cabin, or a lakeside cottage, your vacation home adventure awaits!


This blog post is for informational purposes only and is not intended as financial or real estate advice. Consult with a professional advisor before making any significant financial decisions.