What Physician Entrepreneurs Need to Know About Buying a Vacation Home

As a physician entrepreneur, you’ve likely spent years honing your medical expertise while learning to think more like a business owner. One of the intriguing entrepreneurial moves you may be considering is buying a vacation home—not just as a getaway for your family, but potentially as a real estate asset that builds lifestyle flexibility and financial upside.

But is a vacation home a savvy investment or a classic “dumb doctor deal”?

Let’s unpack what you really need to know about purchasing a second home with your entrepreneurial mindset engaged.

Why Vacation Homes Appeal to Physician Entrepreneurs

You’re likely drawn to the idea of a vacation home for the same reasons most are—rest, connection, escape, and the joy of having a place that feels like yours. But as a physician entrepreneur, you’re also evaluating:

• Whether the asset can produce cash flow

• If tax advantages can be harnessed through short-term rental strategies

• How it fits into your broader micro-business or lifestyle design

And if you’ve followed my blog for a while—like this piece on STR investing and cost segregation—you know that vacation homes can be leveraged for far more than just personal R&R.

The Case Study: How "Dr. Lisa" Made Her Vacation Home Work for Her

Meet Dr. Lisa, a 44-year-old OB/GYN who was burning out from years of call schedules and hospital politics. Inspired by the content inside the Physician Entrepreneur Academy (PEA), she decided to diversify her income and explore real estate as a secondary revenue stream.

Her criteria:

• A lakefront property within driving distance of her home

• Strong rental demand during spring through fall

• A property that could double as a retreat for her and her family

After doing her due diligence, she bought a 3-bedroom cottage on a popular Midwestern lake, investing in smart upgrades and working with a co-hosting service to manage guests via Airbnb. She took advantage of the short-term rental (STR) loophole to significantly offset her clinical income with rental losses on paper—and even reclassified herself under the Real Estate Professional Status (REPS), allowing for deeper tax advantages.

After her first full rental season, Dr. Lisa:

• Covered 90% of her annual expenses with short-term rental income

• Used the property 3 weeks a year for her family vacations

• Reduced her taxable income by $40,000 thanks to depreciation and REPS

Dr. Lisa didn’t just buy a vacation home—she built a lifestyle asset that aligned with her evolving identity as a micro-business owner.

Buying a Vacation Home: The Physician Entrepreneur’s Checklist

1. Are You Consuming or Investing?

Here’s a tough-love insight: most vacation homes are consumption, not investment. Just because something appreciates in value doesn’t mean it cash flows or aligns with your business goals.

Rule of Thumb: If you won’t use the property at least 3 months a year or it won’t cash flow significantly, consider renting instead of buying.

You can read more about this mindset shift in my blog post: “Say Yes to Self-Employment”.

2. Do You Understand the Tax Implications?

Taxes can be both a liability and a benefit. If you rent out the home, you may qualify for deductions related to:

• Property taxes

• Mortgage interest

• Repairs and cleaning

• Depreciation

Additionally, cost segregation studies can dramatically accelerate your depreciation deductions, which is something I’ve done with my own STR properties. Read about it here: “Tax Advantages of STRs”.

If you’re not renting, your tax breaks are limited and may be capped due to SALT deduction limits.

3. Can You Afford It Without Becoming “House Poor”?

Remember: a second home brings second costs.

• Mortgage payments (or opportunity costs if paid in cash)

• Property taxes, insurance (especially in high-risk areas)

• Furnishing and seasonal upkeep

• Property management fees if you don’t self-manage

• HVAC, plumbing, appliances—and surprise repairs

A mistake I often see is physicians jumping in emotionally without a full pro forma or financial model. Avoid buyer’s remorse by modeling your projected costs vs. income. Better yet, discuss your plans with a CPA familiar with real estate for physician entrepreneurs.

4. Will You Use It, Rent It, or Both?

If you plan to rent it via Airbnb or VRBO, ask yourself:

• Can I handle property management or do I need to outsource?

• How much time will it take to onboard the home, optimize the listing, and handle turnover?

• How often will I realistically use it?

• Is my target market strong enough to sustain off-season revenue?

Remember: your peak vacation times are also peak rental income times. Renting it out means you might have to sacrifice access during holidays or summer.

5. Are There Better Alternatives for Now?

Not ready to buy? No problem. Consider:

• Fractional ownership with other physicians

• A rental partnership with friends

• Timeshares (be cautious—liquidity is poor, but they can work in narrow circumstances)

• Just renting a luxury Airbnb each year and investing your capital elsewhere

Buying may be the dream—but sometimes building cash flow elsewhere first (like a side gig, cash-pay clinic, or B2B service) is the smarter play. Explore these alternative revenue streams here.

The Entrepreneurial Edge: How Vacation Homes Can Be Part of Your Business Strategy

Owning a vacation home isn’t just about luxury—it can be an entry point into a larger real estate portfolio or lifestyle design strategy.

As part of the PEA ecosystem, we teach you how to:

• Build short-term rental businesses that are tax-optimized

• Structure your vacation home under an LLC or S-corp when appropriate

• Understand when it’s time to go from side hustle to asset management

Whether you're new to real estate or scaling a small portfolio, the tools inside our Physician Entrepreneur Academy Memberships will help you think like a business owner—not just a physician with a second house.

Final Thoughts: The Doctor in the Mirror

At the end of the day, buying a vacation home is about aligning your lifestyle, financial, and entrepreneurial goals.

Ask yourself:

• Is this really about rest, or am I trying to impress others?

• Can I make this a cash-producing asset, or is it a personal indulgence?

• Am I buying this home for who I am today—or the business owner I want to become?

Vacation homes aren’t right for every physician. But for the right doctor with the right strategy, they can be a launchpad to a more diversified and intentional life.

Download my free Vacation Home Checklist here

Join the PEA Movement

If you're serious about leveling up as a physician entrepreneur, I invite you to join the Physician Entrepreneur Academy (PEA).

We offer three memberships tailored to your journey:

• 🌱 PEA Explorer – $99/year: Perfect for those curious about entrepreneurship with access to foundational resources

• 🚀 PEA Builder – $499/year: Ideal for physicians launching or growing a micro-business (includes bonus tools, checklists, and masterclasses)

• 🧠 PEA Pro – $999/year: For the growth-minded leader ready to scale and network deeply within our physician community

👉 Become a PEA Member Now

Start building a life that works for you—not just because of your white coat.

If you’d like help exploring whether a vacation home fits your goals—or how to maximize it as part of a physician-focused real estate plan—reach out to me or connect through the SimpliMD community. We’re here to support every step of your journey from healer to entrepreneur.

Stay smart, stay independent.