Second homes are becoming more expensive, and house hunters should examine interest rates, upfront fees, maintenance charges and taxes when calculating the cost. 

Demand for second homes has ramped up in the last couple of years among affluent Americans and foreign national buyers.  

Seventy percent of respondents in a 2021 national survey said they were interested in a second home or already owned one, up from about 60 percent the year before, according to RCLCO, a real estate advisory firm that conducted the survey.  

“We have seen some interesting changes, especially among millennials in their 30s and 40s, who have been gaining a lot of wealth.”  “The rise of remote work changed the calculus for a lot of families for the ability to live somewhere else for parts of the year.”

Favorite Second-Home States 

Florida and California top the list of the states most preferred for second homes, according to a survey from a real estate consulting firm.  

Second homes are typically used only a few months out of the year, so it’s crucial for buyers to consider the costs before signing a contract. Some states, like Florida, have a waiting period after a contract is signed, giving buyers additional time to do their due diligence, but it’s important to research the market before starting the hunt for a home.

Here are four tips to help navigate the costs of buying a second home.


Mortgage rates fluctuate daily and are affected by inflation, which is at a 40-year high. To protect yourself from higher mortgage rates later, set your rate as early as possible.  

Buyers relying on financing should line up their loan approval well before making an offer on a home.

The Consumer Financial Protection Bureau has a handy online tool to help potential home buyers determine what mortgage rate they can expect in every state.  


Mortgages typically come with upfront costs, including appraisal fees and pro rata property taxes. Most are standard, but buyers looking to reduce their closing costs can negotiate some fees with lenders on third-party services, like pest inspections. 


Condos and other planned developments typically have a homeowners association that maintains the finances of the community through monthly or quarterly maintenance fees, which are often based on the size of the complex and the type of amenities that are covered.

Buyers should find out what the fees are from their broker in advance and whether the association has reserves, or money stashed in a rainy-day fund. Buyers should obtain any and all disclosures of potential upcoming assessments. 


Tax breaks are available to homeowners, including deductions for property taxes and interest on mortgage payments, if their second home is intended for personal use.  

To help defray the costs of maintaining a second home, though, some owners might rent out the property, especially if they are planning to live there later, said Henry J. Grzes, lead manager for tax practice and ethics with the American Institute of Certified Public Accountants.

Owners of investment properties qualify for other tax breaks, including deductions for maintenance and depreciation, according to the I.R.S. “You are allowed to deduct up to $25,000 in losses in any year,” he said.  

Other tax savings are available to owners who qualify for discounts. “Pay your tax bill early,” he said, “and look at things like enhancements to your utilities through energy credits like solar.”     

As reported in The NY Times