Second Homes

A second home is one of the most emotionally compelling and financially complex purchases an affluent household can make. The appeal is real — a dedicated family retreat, flexibility over vacation timing, potential appreciation in a desirable market, and the possibility of rental income. The costs that make that appeal more complicated are equally real, and they accumulate across categories that aren’t always obvious before purchase.

The carrying costs of a second home are where most buyers underestimate. Property taxes in popular resort markets can be substantial — a $3 million mountain home in Aspen or coastal property in the Hamptons can carry $30,000–$60,000 in annual property tax. Home insurance in coastal markets has become increasingly expensive and difficult to obtain, particularly in Florida, California coastal zones, and hurricane-exposed Gulf properties, where annual premiums for high-value homes can reach $25,000–$60,000. HOA fees in managed resort communities add another $5,000–$20,000 annually.

Management costs are the hidden layer that surprises second-home buyers most consistently. A property that sits vacant without someone actively managing it deteriorates quickly. Professional property management — particularly for properties offered as short-term rentals — costs 20–35% of rental revenue. For a property not rented at all, a basic caretaker arrangement still runs $5,000–$15,000 annually for a property that requires regular attention.

For households weighing a second home against other uses of capital, the buy vs. rent framework applies here in a different form — the question is whether owning the vacation property outright competes favorably with renting a comparable property for the weeks you’d actually use it. That math often surprises buyers. The Real Estate pillar covers second homes alongside property tax and home insurance — the two largest recurring costs that vary most by market.