$33,142 a year on $288,700 in, a 13.2% cash-on-cash return

Amber bought in Gulf Shores, Alabama, Alabama's family Gulf market, where summer carries the year and the shoulder season is the underwriting risk. The purchase closed at $1,595,000.

Getting in cost $288,700. That is $170,000 of down payment, $15,950 in closing costs and $102,750 of furniture, linens, photography and everything else that has to be in the house before the first guest arrives.

The design budget is the line most buyers underestimate. It is not decoration, it is the difference between a property that books at the market rate and one that sits below it, and it has to be funded at closing rather than out of the first season's revenue.

Against that entry cost the property returns $33,142 a year after management, cleaning, supplies, utilities, insurance, property tax and debt service, which is a 13.22% cash-on-cash return.

For context on the market rather than this property: Gulf Shores entry prices run $450,000 - $950,000, average daily rates $230 - $410, occupancy 54% - 63%, and gross revenue $55,000 - $115,000. March through August, mirroring the Florida panhandle. Those are estimates assembled from closings and active comparables, not a projection for any specific house.

The tax position is where a purchase like this earns its keep for a high earner. A cost segregation study reclassifies part of the purchase price into five, seven and fifteen year property, which under current bonus depreciation rules produces a large first-year deduction. Whether that deduction offsets W-2 income depends on the seven day average stay test and material participation, both of which are facts about how the property is run.