Do you have a dream of a place in the sun which pays for itself? Or a place where you can lie on the beach while the money rolls in?

Few of us are lucky enough to be able to maintain a second home just for personal vacation use. Others of us are able to buy and rent with an eye toward future appreciation. For most are many ins and outs of the landlord/tenant business.

For example, it may sound backward to say a net rental loss is a good thing. But that's the way the tax law works. When you show a rental profit, you have to pay tax on that money; and it may put you in a higher tax bracket. But if you show a loss, you can reduce your taxable income. That not only reduces your tax due, but can lower your tax bracket.

And strange as it may seem, a net rental loss doesn't necessarily mean you lost any money. If the rental income exceeds expenses (taxes, interest, operating expenses), you actually would have made a profit. But this is before you subtract depreciation - and that probably would give you a net rental loss on paper.

Of course, this doesn't consider equity. But unless you have a loan on which you've been paying for a long time, that probably won't amount to much - perhaps no more than the actual profit you made.

You will have had your place in the sun and had it pay for itself!

Here are some of the things you should know about the different kinds of rentals and how to make them work for you.

Year-Round Rental

This means you can't use the place as your own vacation pad, but from a tax stanndpoint it's the most desirable way to rent. You will be able to deduct from rental income the total amount of interest, taxes, expenses and depreciation. And you would be able to show a rent rental loss, with no limit on the number of years you may do this.

This is also the easiest rental to manage. There is only one tenant, hopefully, to find and get settled. And this means less expense involved in renting, less expense for cleaning, advertising, etc. It should involve fewer trips to the shore to oversee the property if you lice elsewhere. There also shouls be fewer repairs since longer-term tenants tend to take better care of the property. So, in all, it usually means less worry.

Besides giving up your won getaway place, there are other drawbacks to the year-round rental. You might gross less money than if you rented it weekly for the summer and kept it rented for 16 straight weeks. That could, however, be offset by the additional expenses, work and trouble involved in finding weekly rentals.

Seasonal Summer Rental

If you're looking for a simple summer plan, this is it. There is only one tenant to find for the entire summer (usually May 15th through September 15th.)

Provided you don't use the place yourself more than 14 days during the year, you will qualify for all the tax benefits as if you rented it year round. And that means you can show a net rental loss.

Income from summer seasonal rentals is generally less than for weekly or monthly summer rentals. But it's guaranteed income, and the decreased workload may offset that.

Weekly or Monthly Summer Rental

If you don't mind more work and more uncertainty, here's the chance to make your money.

Weekly and montly summer rentals are much more difficult to manage unless you have developed a list of regular tenants or use a rental agent. There is also more work involved in cleaning, overseeing, etc. - and that means more expense. But there is generally more money to be made if the property can be kept rented the entire time.

Monthly rates are lower than weekly but, as in seasonal rentals, comparatively less work.

The tax situation is basically the same as for year round or seasonal rentals, if you do not use the place yourself for more than 14 days. (If you do use it that much, see Personal Use Combined With Rental.)

Winter Rental

One way to warm up your bank account is with a winter rental, which can help offset mortgage payments during the off-season months.A winter rental is generally from early fall to late spring.

Whether it is much of a tax break will depend on the summer usage. If you use the place for personal purposes for more than 14 days during the year, you will only be able to deduct your expenses for the winter to the extent that they exceed your gross rental income less the pro-rated amount of taxes, interest, and casualty losses (see Personal Use Combined With Rental).

This means, basically, that unless your winter rental income exceeds the amount you pay in the winter rental months for taxes and interest, you will be unable to deduct any of the winter rental expenses including depreciation. Unfortunately, you will be unable to show a net rental loss for the year.

There are some drawbacks to a winter rental. For one, it is often difficult to find a reliable tenant. Many prospective tenants have low-paying, unstable winter jobs. This can mean rent collection problems, evictions, or a broken lease. Winter tenants are often transients and tend not to be as careful with the property.

Another problem is that rental rates are much lower in the winter. You might only get from $100 to $150 a month, even for a furnished place which brings twice that for a summer week.

All in all, this is the most troublesome rental category and may not be worth the bother.

Personal Use Combined With Rental

Of course, for many of us the ideal situation is an ocean escape and rental income too. But here the tax law becomes tricky.

In general, if you use the place yourself at all and do not show a net rental profit for two out of five consecutive years, you lose the right to take a rental loss. You may offset gross rental income by deductions for taxes, interest, casualty losses, operating expenses and depreciation . . . but only to the extent that they reduce your profit to zero.

If you use the place yourself for less than 15 days, and can show a net rental profit for two of five years, you may claim all the benefits and deductions as if the place were rented for the entire year, including expenses and depreciation. This means a net rental loss can be claimed.

If you use the place yourself for more than 14 days, and can show a net rental profit for two of fice years, you may deduct interest, taxes and casualty losses to the extent that they offset rental income. Operating expenses and depreciation may be used to reduce to zero any rental profit remaining.

Lynne F. Peterson is an editor with NBC who rents out three vacation houses.