Should You Turn Your Second Home into a Short-Term Rental?

Thinking about turning that lake house or mountain condo into an Airbnb? You’re not alone. With New Hampshire’s tourism booming and remote work giving people more flexibility, many homeowners have been exploring the short-term rental market to offset mortgage costs. But before you post your property on Airbnb or VRBO, there are a few things to consider.

The Demand: Is Your Area Hot?

Location is everything in the short-term rental game. Homes near ski resorts, lakes, universities, and Portsmouth’s Seacoast often see strong demand year-round. Meanwhile, quiet rural areas might do better with long-term tenants. Do a little research: check local listings to see average nightly rates and occupancy for homes similar to yours. That will give you a realistic idea of income potential.

Know the Local Rules

Short-term rentals are regulated town by town in New Hampshire. Some places require a permit, inspection, or special zoning approval. Others have strict limits on the number of rental days per year or outright bans. Ignoring these rules can lead to hefty fines or angry neighbors. Before you list, call your town hall and make sure you’re in compliance. You may also need to register for state lodging taxes.

Crunch the Numbers

Short-term rentals can generate more income than a traditional lease, but they also come with higher costs. Factor in cleaning fees, linen turnover, booking site commissions, insurance, and time spent communicating with guests. You should also budget for vacancies; your place won’t be full 365 days a year. Run a few scenarios and compare them to what you’d earn with a standard 12-month tenant.

Insurance and Liability

Your regular homeowners policy likely doesn’t cover short-term rental activity. Talk to your insurer about adding a rider or switching to a policy that covers rental use. Liability coverage is especially important when you’re welcoming guests you don’t know. Some booking platforms offer a host guarantee, but it’s not a substitute for proper insurance.

Hands-On or Hands-Off?

Hosting can be fun, but it’s also a job. Who will answer questions at 11 p.m. when the Wi-Fi goes down, or coordinate cleaning between guests? If you’re not local, you’ll need a reliable property manager or co-host. Many NH property managers offer full-service short-term rental management; they take a percentage of the booking fee in exchange for handling everything from marketing to maintenance. But not all short term managers are equal. Let me know if you need a referral to a great short-term property manager in NH.

Final Thoughts

A short-term rental can be a great way to turn your second home into an income-generating asset. Just make sure you know the local laws, have realistic income expectations, and are prepared for the extra work. Want help evaluating whether your NH getaway is a good fit for the short-term rental market? I’d be happy to point you to resources and local experts.