Second Homes and Vacation Homes qualify as 1031 replacement property as long as you limit your personal usage to no more than two weeks per year, or 10% of the time the property is rented out each year (whichever is greater) during your first few years of ownership. With the advent of the short-term rental industry, companies like Airbnb, VRBO, and Vacasa can help Second Home / Vacation Home owners generate great returns from renting our their properties on a short-term basis (like hotel rooms). These companies can also help investors secure professional property management, so that your short-term rental property is completely hands-off. Last but not least, you can own a piece of property in your favorite vacation destination where you’ll personally be allowed to stay!
Bottom Line: You can buy a second home / vacation home in your favorite vacation destination, earn rental income from it from renting it out as a short-term or long-term rental, AND use it personally!
