Couple of other items many would be owners of coastal vacation properties tend to forget: - everything is being bathed in salt spray throughout the winter season. This stuff just eats air conditioner coils, fasteners, window hardware, cedar siding, roofing materials, pool pumps etc. While you may spend a year or two without major bills, there will be other years that are just hurtful. Sure, it's all a business expense (subject to passive activity loss rules), but you need to build it into the budget. - short term renters are hard on carpeting, furniture and paint. Comments on online services like VRBO are merciless. If you want to continue charging full rates for your property (and not be the 'party house'), you have to keep it in top condition and that means remodeling and replacing furniture every couple of years. - unless you live local, you are paying retail+ for emergency repairs. I came home last night and the pool pump had pulled in air. 15min repair with a gasket off the shelf. In a vacation property, that is a callout for the pool guy. Chances are, he is going to sell you a new pool pump + the callout for his high-school buddy the electrician who has to screw two wires into a terminal ;-0 . - insurance cost. These are 4 story buildings. A drunk guest who tumbles down a flight of stairs into the pool is your problem. So your insurance is not just a plain vanilla homeowners policy, it needs to cover guest liability. Even then, lawsuits are not unheard of, and even if the insurance pays for all the lawyers and the eventual settlement, you are out time for depositions and you are the recipient of the plaintiff lawyers general purpose harassment. - compliance cost. There at times lodging taxes on short term rentals and various 'impact fees' and 'resort fees' that account for the use of government services by vacationers (n/a for Dare Co afaik). - named storms often bump up your property insurance deductible into a percentage of insured value. You need to build a reserve for rebuilding the pool after a storm surge or redoing all your landscaping and patching the siding even if the sructure of your beach house is preserved. If someone owns a property only for a short holding time (<5 years), they may never see any of these items crop up. If you look at it on a 20 year payoff timeframe, some if not all of these items are going to show up on your spreadsheet. Remember, if beachfront homes were wildly profitable, Goldman Sachs would own all of them by now ;-) Even if it is not wildly profitable, the key benefit is that you build equity in the property. 4 out of my 8 neighbors in MD own (or owned) vacation homes in the outer banks. All but one have stopped renting out in favor of using them as a second home now that they are retired. I just hate being a landlord enough that I have never taken the plunge on any kind of vacation rental property. I do see myself owning a little shack on the inside of Hatteras Island in Buxton or on Ocracoke to just keep for family use one of these days. One of my coworkers in ND still has their families 'beach shack' on one of the VA islands. But that's what it is, a double-wide on a town lot in Chincoteague. That's a very different concept, a personal luxury rather than a rental property which is simply a small business.