“Lifestyle Assets”: Can You Mix Business & Pleasure with Second Homes?

The Big Picture on Lifestyle Assets Investment:

• • Lifestyle asset investing lets you buy vacation rentals in favorite destinations, but success hinges on realistic income expectations and market data.

  • Falling in love with a property can lead to financial losses. Always evaluate with tools like AirDNA and PriceLabs and plan for worst-case scenarios.

  • Personal use, seasonal demand, and high management costs all impact profitability. Investors must balance lifestyle perks with financial performance.

Unlike traditional real estate investments, which are purely financial, Lifestyle Asset Investing considers properties that serve both as profitable investments and personal retreats. This approach allows investors to purchase properties in destinations they love while still maintaining profitability.

Katie Klein, a relatively new investor herself, owns two short-term rental properties in upstate New York and a long-term rental in London. Her short-term rental strategy isn’t just about numbers—it’s about investing in places she enjoys visiting. When the properties aren’t booked, her family gets to use them, adding significant lifestyle value to the investment.

“I always ask myself: Would I want to stay here? Is this a place I would love to visit?” Katie explains. “That mindset helps me understand my guests better and cater to their needs, which ultimately results in better guest satisfaction and more bookings.”

The Biggest Pitfall: When a Second Home Becomes a Financial Burden

While Lifestyle Asset Investing offers unique advantages, it also comes with potential risks—particularly when investors blur the line between a second home and a short-term rental. Some investors justify overspending on a vacation property by calling it an investment, even when it fails to generate enough income to cover expenses.

“If your goal is to generate cash flow, you have to be realistic,” Katie warns. “Many people fall in love with a property, overpay, and end up losing money every year. That’s why I always start with the numbers.”

Tools like AirDNA and PriceLabs provide valuable data on market demand and revenue projections. Katie recommends using AirDNA for initial estimates but also factoring in the more conservative PriceLabs data to set realistic expectations. “I always look at the worst-case scenario so I know if the investment still makes sense.”

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Defining Your Investment Goals

Not all real estate investors have the same goals. Some want maximum cash flow, while others are comfortable with a property that simply offsets costs. That’s why it’s important to define your personal and financial objectives before making a purchase.

Katie shared her own dilemma: There’s a market she and her husband love, but investing there wouldn’t generate enough income to fully cover expenses. “We know we’re not ready for that yet. Maybe one day we will be, but for now, we need properties that perform financially.”

If your goal is to own an amazing property in a dream destination and you’re okay with it just offsetting some costs while you take advantage of tax benefits, that’s a valid strategy. However, if your goal is purely cash flow, your approach needs to be more disciplined.

Other Key Factors: Seasonality & Management Costs

Short-term rental markets fluctuate drastically based on seasonality. A lakefront home may be fully booked in the summer but sit empty in the winter. Similarly, mountain cabins might thrive in the winter and struggle in the off-season.

“Seasonality matters,” Katie emphasizes. “One of my properties is in Lake George, which is a summer destination. We maximize bookings during peak season and stay flexible about using it ourselves. If it’s unbooked last minute, that’s when we go.”

Another overlooked cost is property management. Unlike long-term rentals, short-term properties require higher maintenance, frequent cleanings, and hands-on guest communication. Investors must factor in these expenses before assuming their rental income will translate to pure profit.

The Hidden Cost of Owning Multiple Properties

Another potential downside of investing in lifestyle properties is that they can limit your travel flexibility. Katie points out that her parents own two second homes, which means they spend nearly all their vacation time there rather than exploring new destinations.

“If you own vacation rentals, you have to ask yourself: Am I okay returning to the same place over and over again?” Katie says. “For us, that works for now because of our daughter’s age. But down the line, we might want to explore more.”

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Final Thoughts: Is Lifestyle Asset Investing Right for You?

Lifestyle Asset Investing isn’t for everyone. It’s a strategy that blends financial intelligence with personal enjoyment. If you’re considering this approach, ask yourself:

• Would I enjoy visiting this property regularly?
• Am I comfortable balancing personal use with profitability?
• Do the numbers still make sense if the property doesn’t get fully booked?
• Can I handle the seasonality and management costs?

If you can answer “yes” to these questions, investing in a lifestyle asset might be a great fit for you.

Katie Klein’s insights show that real estate investing doesn’t have to be purely about numbers. By thinking strategically and aligning investments with your lifestyle, you can create a portfolio that brings both financial and personal rewards.