Should I Buy A Vacation Home: Second Home Benefits and Cost
January 30, 2026 - A second home is easy to romanticize. A lake house where the grandkids learn to swim. A beach condo that turns Thanksgiving into a real tradition. A ski cabin where “we should get together sometime” becomes an annual week you actually protect on the calendar.
That pull is real, and for many families it comes from a healthy place: more time with the people you love.
At the same time, buying a vacation home can introduce financial pressure, logistical complexity, and—sometimes—family friction. This post isn’t personalized financial advice, and it isn’t meant to tell you what you “should” do. Think of it as a practical framework and a set of considerations we often see families weigh as they decide whether a second home is worth exploring.
The real benefit: relationships and family time
A second home can become a gathering place. It can make it easier for adult kids to come back, for friends to join, and for extended family time to happen more naturally. Instead of negotiating where to meet every year, you have a default place that makes the logistics simpler.
For some families, that consistency can create meaningful momentum:
Longer stays (a week instead of a weekend)
More frequent visits (because the plan is familiar)
Traditions that stick (summer weeks, holidays, milestone birthdays)
More unhurried time together (which is what people remember)
If your primary reason for owning a vacation home is building memories with family, you’re not alone. This may be reason enough, but it is good to be aware of potential tradeoffs of owning a vacation home, some that may not be so obvious. If you have the money to buy a vacation home and this is what you want to do with your money, it can be a wonderful experience.
The real cost: what it may do to cash flow and net worth
One reason second homes can be tricky is that some people mentally file them under “investment.” Sometimes that’s reinforced by hopeful math: “It will pay for itself,” “we’ll rent it out when we’re not there,” or “real estate always goes up.”
It’s possible for a vacation property to appreciate meaningfully over time, but it’s also possible for it to be a drag on your net worth at the same time, especially when you account for all-in ownership costs. Markets move in cycles, and resort markets can be particularly sensitive to broader economic conditions.
A common planning shortcut is to estimate the annual “all-in” annual cost of owning a second home at roughly 5% to 10% of the home’s value, with the higher end potentially reflecting a fuller accounting of opportunity cost on equity. This range isn’t a rule, but it can be a useful starting point for estimating the “true cost of owning a vacation home.”
For example, if someone is considering a $2,000,000 resort condo, a rough planning estimate at 10% would be $200,000 per year in total carrying costs including opportunity cost. That number can sound jarring, but it tends to be the kind of figure that gets families asking better questions.
What’s typically inside that “5%–10%” estimate?
Property taxes and insurance (often higher in beach, lake, or mountain areas and sometimes does not qualify for homestead exemption rates)
Repairs, replacements, and ongoing upkeep
Utilities, internet, and security systems
Furnishings and the constant “owners’ closet” spending
Property management and HOA fees
Travel costs and time costs
The most significant is the opportunity cost of the equity in the property, or the interest on a loan
The question families can find clarifying: “What else could we do with the same money?”
If the goal is family time, one useful reframing is:
If we didn’t buy a second home, what would we do instead to encourage the same relationships and memories?
Some families find that renting a vacation home accomplishes most of what they want without the long-term commitment of ownership. The alternative might look like:
Renting the same place every year (and keeping the tradition)
Renting different places as family schedules evolve
Paying for travel so everyone actually shows up
Spending intentionally on experiences in multiple locations
In other words, instead of asking only “Can we afford a second home?” you might also ask, “How much connection could we create if we kept the flexibility and invested the difference?”
The rental program reality: it can help, but it’s not “set it and forget it”
Many second-home buyers look at short-term rental income to offset costs, and sometimes that can work well. At the same time, renting out a vacation home is often more like running a small business than people expect.
Some of the common friction points include:
Property management and platform fees
Vacancy risk and seasonal variability
Wear and tear (which tends to show up faster than expected)
Turnover costs: cleaning, restocking, minor repairs
Competition with other rentals in the same market
Local rules, permitting, and homeowners association restrictions
Tension between your own use and the most profitable rental weeks
So if you’re evaluating if a rental program can absorb the cost of the second home, it may depend on a lot of factors, but is sometimes a mirage.
A practical tip: “test drive” before you commit
One strategy we see families appreciate is progressive renting before purchasing. It’s a way to gather real-world data on usage, family interest, and logistics without locking yourself into ownership.
A simple test-drive path might be:
Rent for two weeks (who shows up, how it feels)
Then rent for a month (how the rhythm holds)
Then try a season (whether you genuinely use it as much as you think)
This can surface practical questions early: Is the drive too long? Do the kids actually want to come? Does the location still feel great after day eight? Does everyone want the same kind of trip?
If you’re thinking “How often will we use a vacation home?” this kind of progressive renting can help you answer it with experience instead of guesses.
Estate planning and inherited vacation homes: the “legacy” dream that may need guardrails
When buying a second home for family reasons, it’s common to picture it becoming part of the estate plan—a place that stays in the family and gets passed down.
That can happen, but it can also get complicated. Shared ownership across siblings and spouses can create pressure around:
Scheduling and holiday weeks
Different financial situations and priorities
Who manages vendors and maintenance
Major repairs and capital improvements
What happens when one person wants out
If keeping the home in the family is a serious goal, many families find it helpful to establish clear guidelines early, including a process for decision-making, a buyout option, and agreed-upon triggers for selling if circumstances change. If the property rolls into a 3rd generation, it is practical to consider if cousins owning a property together will improve or detract from their relationships. These types of arrangements can plant seeds of discontent among siblings and cousins that can grow into uncomfortable relationships. This is a potential cost that should be considered before encouraging adult children to own a property together.
A quick decision checklist you can use as a filter
Here are a few questions that can clarify whether buying a second home fits your situation:
How many nights per year do we realistically expect to use it?
Who is it for—and how likely are they to come regularly?
If costs come in higher than expected, would our overall financial plan still feel comfortable?
Do we have enough liquidity after the purchase to handle surprises?
Do we have maintenance help we trust or will this become a second job?
If family usage declines, what’s the exit plan?
Can we accomplish the same family goals for less money by not owning?
Closing thought
A second home can be a meaningful lifestyle choice; it can also be a decision that’s easier to regret than people expect, especially if the ongoing cost and complexity are underestimated.
If you’re considering buying a vacation home, it may be worth running the decision through a planning lens: cash flow, opportunity cost, flexibility, and the family dynamics that come with a shared gathering place. If you’d like, we can help you evaluate how a second home might fit into your broader financial picture in a way that’s aligned with your goals and mindful of the tradeoffs, or evaluate how your current vacation home will impact your future estate plan.
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Information presented is for educational purposes only and is not personalized investment, financial, legal, tax, or accounting advice. Nothing on this website should be interpreted to state or imply that past performance is an indication of future performance. All investments involve risk and unless otherwise stated are not guaranteed. Be sure to consult with tax, legal, accounting, and financial professionals about your specific situation before implementing any planning strategies. Investment Advisory Services offered through Timberchase Financial, LLC, a Registered Investment Adviser with the U.S. Securities & Exchange Commission. Registration does not imply a certain level of skill or training.