Should you rent or sell your second home?

The 3 questions you should ask yourself before you rent or sell.

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Whether your second home served as a beloved vacation spot or was intended as an investment property, you’ve determined that it’s ready for its next step.

But choosing the right path can be complicated—and confusing.

Here are three thought-provoking questions all property owners should ask themselves when asking: “Should I rent or sell?”

Is it better to sell or rent my house?

Deciding whether to rent or sell a second home requires you to think critically about your local market and the long-term benefits of each option.

Reasons you may want to sell your home:

  • To capitalize on extraordinary demand in your local real estate market
  • To address pressing personal financial matters
  • To offload a property that needs extensive repairs

Reasons you may want to rent your home:

  • To offset your mortgage, property taxes, and maintenance costs while you continue to build equity
  • To generate long-term cash flow from your rental property
  • To continue enjoying your home while sharing it with vacation rental guests

Will renting my home work with my lifestyle?

Common barriers to owning a rental property are upkeep, tenants, and the tricky job of balancing your personal life with the demands of your rental home.

Long-term rentals

Long-term rentals offer property owners the opportunity to build rapport with a few tenants at a time.

But in exchange for what could be a more “stable” relationship, you may make less from renting your property monthly than you could on a nightly basis. Additionally, long-term tenants may not immediately notify you of problems in your home, leaving you with potentially higher maintenance costs in the long run.

As such, both real estate investors and everyday property owners have increasingly set their sights on growing vacation rental markets.

Vacation rentals (a.k.a. short-term rentals)

As guest preferences shift away from hotel accommodations, property owners have found it easier to see how short-term rentals offer benefits of renting with fewer of the common drawbacks—especially when a capable vacation rental manager cares for the property.

Long-term rentals vs. vacation rentals

Long-term rental

Vacasa-managed vacation rental

DIY-managed vacation rental

Home care

Coordinate with tenants for home repairs and upkeep

Local team alerts you to issues and arranges repairs with trusted vendors

Find vendors and schedule repairs on your own

Income

Lease at one rate over a long period

Rent at variable nightly rates to maximize revenue

Set rates or buy one-size-fits-all pricing software

Who's in your home

Find and screen potential tenants

Screening networks, 24/7 guest care, and booking support

Manage and respond to guests’ needs 24/7

Cost

Your time to DIY, or fees to hire a property manager

A tailored fee based on your unique home and local market

Your time, plus separate fees for marketing and pricing services, cleaning supplies, and more

As you can see, the rental options available to you as a second home owner each have their pros and cons. It’s a good idea to sit down and consider your life as it is now and your plans for the future, both personally and financially.

Learn more about long-term vs. short-term rentals >

Modern vacation rental management.

Your home is a success waiting to happen. We'll show you how.

What’s the financial impact of renting vs. selling?

Whether renting or selling is the better financial decision depends on your personal financial life and your home itself.

Our two cents: if renting could be a good option for you, we say go for it.

Why? When you sell your secondary property, primary residence, investment property, or any other real estate asset, you cut yourself off from positive market changes that impact your home’s value.

Using your home as a rental—especially a vacation rental—is a wonderful way to continue building equity while offsetting the cost of owning your home. And when it’s time to sell, you’re not just listing another house: you're selling a rental unit that has proven earning abilities. That could be a powerful factor in achieving a higher asking price.

It’s also worth considering the tax burden of selling your home, especially if the capital gains tax would be a significant expense. For property owners who are looking at long-term capital gains, consider how the capital gains tax rates would impact your bottom line when deciding to sell or rent an investment property. It might also be worth looking at a 1031 exchange that keeps you in booming vacation rental real estate markets.

It’s a lot to consider. We always recommend consulting with tax and real estate professionals to make sure you’re fully educated about your options.

If you own a vacation home and would like to explore the possibilities, Vacasa Real Estate specializes in helping homeowners buy and sell a rental property with confidence.

Learn more about selling a vacation home with Vacasa Real Estate >

Pet-friendly cabin living area in Gatlinburg, TN

Renting vs. selling FAQ

Vacation rentals can be profitable, under the right circumstances. We recommend looking into Vacasa’s full-service vacation rental management if you’re keen to maximize your income.

Learn how to make money on a vacation rental property >

The tax consequences of selling a second home depend on your home’s location and how long you’ve owned it. We recommend speaking with a tax professional to understand your specific situation. They can also help you answer questions like “Can you deduct a loss on a vacation home rental?” and “Is rental income taxed as ordinary income?”

At Vacasa, we provide our homeowners with detailed tax information to make their filing as straightforward as possible. Check out some of our tax resources to learn more about vacation rental taxes and deductions.

10 tax deductible vacation rental expenses >

Tax guide for short-term rentals >

Vacation home tax rules you should know >

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You've got questions. We've got answers.

Call 844-518-0967 to speak with a Homeowner Consultant, who can answer preliminary questions and see if we’d be a good fit for you.

If you'd like to move forward, we’ll put you in touch with our market expert in your neighborhood to explore the financial potential of your home, outline our management fee, and introduce your local team.

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Vacasa offers property management and other real estate services directly through Vacasa LLC and through Vacasa LLC's licensed subsidiaries. Click here for more information about Vacasa's licensed real estate brokerage/property manager in your state. Vacasa’s licensed real estate brokerages/property managers include: Vacasa Alabama LLC; Vacasa Arizona LLC; Vacasa Colorado LLC (Micah Victory); Vacasa Delaware LLC, 302-541-8999; Vacasa Florida LLC; Vacasa Louisiana LLC, Dana MacCord, Principal Broker, ph 504.252.0155 (Licensed in LA); Vacasa Michigan LLC, 947-800-5979; Vacasa Missouri LLC, Susan Scanlon, Designated Broker; Vacasa Nevada LLC; Vacasa New Hampshire LLC,45 NH-25, Meredith, NH 03253, Dave Grant, Broker of Record; Vacasa New Mexico LLC, 503-345-9399; Vacasa New York LLC, 888-433-0068, Susan E. Scanlon, Real Estate Broker; Vacasa North Carolina LLC; Vacasa Pennsylvania LLC; Vacasa Real Estate Corporation, California DRE #02105811, Joseph Czapkowicz, California DRE #01380722; Vacation Palm Springs Real Estate, Inc., California DRE #01523013, Mark Graham, California DRE #00700720; Vacasa Real Estate LLC (licensed in Colorado, Daned Kirkham); Vacasa Real Estate LLC (licensed in Idaho, Oregon, and Utah); Vacasa Real Estate LLC (licensed in Maine, Michael McNaboe, Designated Broker); Vacasa Real Estate LLC (licensed in Texas, Debra Brock, Designated Broker); Vacasa Real Estate LLC (licensed in Washington, Robert Brush, Designated Broker); Vacasa Seasonals Inc., California DRE #02160171, Lisa Renee Stevens, California DRE #01485234; Vacasa South Carolina LLC; Vacasa South Dakota LLC; Vacasa Tennessee LLC; Vacasa Vacation Rentals of Hawaii LLC, 3350 Lower Honoapiilani Road, Suite 600, Lahaina, HI 96761; Vacasa Vacation Rentals of Montana LLC, Terah M Young, Licensed Property Manager; Vacasa Virginia LLC; Vacasa Wisconsin LLC; Vacasa Wyoming LLC. In Canada, this advertisement is provided by Vacasa Canada ULC, CPBC lic. number 75826, 172 Asher Rd. V1X 3H6 Kelowna, BC.