Excerpted from How a Second Home Can Be Your Best Investment
by Tom Kelly and John Tuccillo

The down payment has been made. Your financing is in place.

Now, how do you want to handle potential renters' perhaps family or friends of friends' who would really like to occupy your property when you are not there? Should you even rent it out at all? The income would help offset mortgage and tax payments, but is it really worth moving all of your personal belongings, including your favorite bathrobe and slippers, back to your primary residence?

Let's look at a few creative ways to crank significant rental dollars from your New Second Home. If your New Second Home is only in the Interim, or investment stage, you probably need full-time tenants to inhabit the property, pay rent, and thereby reduce your mortgage while the place appreciates (hopefully) and/or fulfills any rental time-period obligation. (To avoid IRS scrutiny, tax advisors say consumers should rent out the property for at least two years before occupying it as a primary residence). For example, if you purchased a small rental home with the idea of trading it down the road for a property in a more desirable area where you plan to spend more time, you need to screen applicants carefully and choose the ones who stand the best chance of safeguarding your investment.

However, if your New Second Home is now in the Cocooning Stage, a family cabin, golf-course fairway home, beach retreat, ski condo, a property you don't foresee selling, then your rental decisions are very different and definitely more personal. There are a number of considerations to ponder before letting strangers, or casual acquaintances, use your place. Do you mind the hassle of leaving? Will the renters really honor your request for no pets? Will your favorite water ski be dinged even though you stowed it in a private place? Do you have the time, patience, and people skills to deal with people who do not consider your home their prized possession?

Read more about second home investment strategies in Tom Kelly's book How a Second Home Can Be Your Best Investment.

Tom Kelly is a real estate columnist and radio show host with 33 years of experience as a professional journalist. Tom also authored five books focusing on second homes, mortgage options and retirement possibilities. He targets Baby Boomers and Retirees, providing consumer tips and helpful hints as well as explaining concepts and terms in a friendly, understandable style. His award-winning and nationally syndicated radio show "Real Estate Today" provides on-air advice to callers. Learn more about Tom.