Let's Ask Katie - November 2026

Hi Katie, We want to buy a rental property but don’t know where to start. What should we think of when buying an income property?  

John and Marie, Newport Beach

Hi John and Marie, 

What a perfectly timed question! Yesterday, I sold the first income property I ever owned. It was a duplex on Balboa Island that my partners and I rented out furnished for leases that were 30 days to over a year. We just returned from a Compass Luxury Summit in The Hamptons where some owners are bringing in $500k - $2 MILLION per summer for their summer season rentals!  I wanted my first property to be nearby so it was easy to manage but we’ll touch on the pros and cons of out-of-area rental properties below as well. 

1. Do you want to visit the area occasionally and rent it out of the rest of the year? This concept is a great way to own a home you can vacation in but also earn rental income. Rent it furnished, get a good property manager, and keep an owner’s closet for your personal belongings. 

2. Do you have a college-aged child who may want to live in a college-town rental? Rather than flushing rent money to pay someone else’s mortgage, you’ll build equity and can sell in a 1031 Exchange or keep the property after graduation. 

3. Vacation vs Long Term Rental: Vacation (under 30 days–usually weekly) can garner up to 4x monthly rents, but can cause a lot of wear and tear on properties, risk becoming a “party” house and upset neighbors. Research carefully to understand the risks and benefits and find a good property manager!

4. If there is an HOA–investigate thoroughly! How much are HOA dues? Is there a limit to the # of properties that can be rented in the HOA? 

Purchasing an investment property is a big step. Find an agent who is not only knowledgeable about the area, but has owned income properties and has first-hand knowledge. 

Note: This information is for educational purposes and does not constitute legal or tax advice. I recommend consulting with a qualified attorney or tax professional to determine the best structure for your specific situation. Katie Machoskie is a REALTOR and Certified Real Estate Negotiator As Founder of the Machoskie & Associates team at COMPASS in Orange County, with over 23 years of experience and over $1.4 Billion in sales. She and her team of neighborhood specialists are ready to assist you anywhere in OC. Have a question? Email her at [email protected] DRE#01380037 Follow her on Instagram @machoskiehomes.com