Investing

Choose a strategy before choosing a property.

A second home for your own use

Consider how often you’ll visit, travel time, year-round ownership costs and maintenance while you’re away. Tell your lender exactly how you intend to use the property; second-home and investment-property financing have different requirements. Don’t assume rental income will cover the payment.

A long-term rental

Research achievable rents, local demand and comparable leases. Evaluate property condition, insurance, taxes, HOA rules, maintenance and management. Verify applicable rental rules and tenant protections before purchasing. A dependable rental plan starts with realistic expenses and reserves.

A short-term or vacation rental

Before you rely on nightly income, confirm current city or county rules, permits, zoning, minimum-stay requirements, occupancy limits, HOA restrictions and any lodging taxes. A property advertised as a vacation rental may not have a transferable permit. Model seasonality, vacancies, cleaning, utilities, platform fees and management costs—and verify insurance for the intended use.

Cash flow: use the complete picture

Estimate collected rent after vacancy, then subtract operating expenses, repair and replacement reserves, and mortgage payments. Stress-test lower rent, longer vacancies and unexpected repairs. Rental income may support a long-term plan, but it is not guaranteed or automatically hands-off; property management also has a cost.

Build wealth across generations

Think about your holding period, debt, diversification and eventual sale or transfer. Appreciation and equity growth are possibilities, not promises. Coordinate ownership and estate planning with an attorney and tax professional so your real estate plan fits your family’s goals.

Buying for multigenerational living

Consider privacy, separate entrances, bedroom placement, accessibility, parking and shared expenses. If an ADU or second unit is part of the plan, verify permits, lawful use, utilities and local requirements. Put ownership shares, contributions, decision-making and an exit plan in writing with appropriate professional advice.

Your investment due-diligence checklist

• Clarify personal use, rental use, timeline and financial goals.
• Verify legal rental use and restrictions directly with the relevant authorities and HOA.
• Review actual operating records where available; independently check projected income.
• Inspect major systems and estimate near-term capital expenses.
• Confirm financing, insurance and cash reserves before removing contingencies.
• Discuss taxes, personal-use allocation, ownership and succession with your CPA and attorney.

For rental tax basics, see IRS Publication 527. Mixed personal and rental use can affect tax treatment; your CPA can apply the rules to your situation.

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