I’ve noticed a pattern among clients.

Many of our clients under 45 are searching for – and actively buying – second homes.

Meanwhile, a number of our clients in their 60s (and beyond) are doing the exact opposite:

They’re selling them.

Coincidence? I think not.

The younger families I work with are looking for a place to bring their kids, gather with friends, get outside, and establish traditions.

For my clients 60+, the second home has started to feel like another thing to maintain. They’re empty nesters. The kids don’t use the house like they once did. Coordinating everyone is harder. And many of these couples increasingly interested in new travel experiences.

When it comes to buying a second home, I think it’s important to acknowledge that you’re really buying three things:
1. Repetition
2. A different environment
3. An obligation

Let’s break these down.

You’re Buying Repetition

Travel is often about novelty. A second home is, in many ways, the exact opposite.

You’re choosing to return to the same town, trails, beach/lake, restaurants, neighbors, and routines year after year.

To some, this can sound limiting. But for many, this is the entire point.

Your kids know where their rooms are. Bikes stay in the garage. Friends know they can visit. Traditions don’t require planning from scratch every year.

The second home eventually starts feeling like just another version of home.

And when kids are young, repetition compounds.

I recently saw a post on X that captured the beauty of repetitive vacations perfectly – something to the tune of:

Twenty weeks of different vacations can create twenty great memories.

Twenty weeks of the same vacation can create a childhood.

Both are valuable, but the predictability and repetition that come with returning to the same place – speaking firsthand now! – can really be incredibly formative as a child.

You’re Buying A Different Environment

I think the best second homes also offer something meaningfully different from your primary home.

Think:

• City → mountains
• Suburbs → beach
• Fast → slow
• Scheduled → unstructured
• Indoors → outdoors

Maybe the house gets your kids outside more. Maybe you’re skiing, hiking, surfing, fishing, biking, or pickleballin’ more often. Maybe friends and family actually spend weekends together instead of saying, “We should all get together soon.”

A second home can make the things you want more of – time outside, family, friends – happen more often.

That alone is a powerful reason to own one.

You’re Buying an Obligation

A second home creates optionality…but it also competes with it.

Why travel somewhere else when we’re already paying for this place?

Why rent a house somewhere new?

Why not go up this weekend?

Then there’s the financial costs: maintenance, insurance, utilities, landscaping, repairs, cleaning, etc.

There’s also the added energy + bandwidth demands and the fact that another property will inevitably occupy some small corner of your brain.

There May Be a Season for It

Which brings me back to those 60+ year old clients that are selling.

Oftentimes, nothing went wrong. The house did exactly what they wanted it to do.

It gave them summer getaways with their kids.
Thanksgiving weekends.
Ski trips.
Friends around the fire pit.
A place everyone associated with family.

Now their kids live in different states and they’d rather spend February in Italy.

The house did its job.

A second home doesn’t need to be a forever decision to have been a great decision.

Before Even Thinking About the Financials:

I encourage my clients to ask themselves:

• What do we want this home to change about our lives?
• How often will we realistically use it?
• Does it make the activities and relationships we value easier?
• Are we comfortable returning to the same place instead of traveling elsewhere?
• Is it close enough that we’ll actually go?
• What would make us sell it someday?

If those answers still have you browsing Zillow…

Let’s talk money.

Don’t Pretend It’s an Investment

Unless you’re explicitly buying an investment property, I generally think about a second home the same way I think about a primary residence: It’s a personal-use asset.

If it appreciates, great.

If you occasionally rent it and offset some expenses, fantastic.

But the ultimate decision to buy should not require either of those things to make sense.

HYPOTHETICAL CASE STUDY: A $750k second home.

Down payment (20%): $150,000.

6.5% Mortgage (80%): $600,000
Principal + interest: Roughly $46,000/year.

Taxes, insurance, utilities, maintenance etc.: Roughly $20,000-$25,000/year.

Total annual cash outlay: Roughly $70,000/year before major renovations or unexpected repairs.*

Now let’s think of this through a cost-per-night lens.

60 nights/year: ~$1,150/night
30 nights/year: ~$2,300/night

At those prices, you can rent some sweet Airbnbs, and next year you can go somewhere completely different.

But there’s another cost that’s easier to miss:

Opportunity cost.

If the $150,000 down payment remained invested and earned a hypothetical 7% annually, it would grow to roughly $580,000 after 20 years.

And the down payment is only part of the equation.

The annual cash flow required to own the house could otherwise be invested, spent traveling, or used to reach financial independence sooner.

A Quick Tax Detour

As a tax-focused financial planner, I’d be remiss not to mention that how you use your second home can have very different tax consequences.

A personally used second residence can potentially qualify for mortgage-interest deductions, though the federal acquisition-debt limit (generally $750k total for newer mortgages) applies across your qualifying primary and second home combined.

Property taxes similarly interact with the overall state-and-local-tax deduction limitation.

Then, if you do consider renting out your property, there is the social-media-favorite “Augusta Rule.”

If you use the property as a residence and rent it for 14 days or fewer during the year, that rental income generally isn’t taxable federally. The rule earned its nickname from homeowners around Augusta, Georgia renting their homes during the Masters.

Rent it more extensively while also using it personally and things get more complicated.

One important threshold is whether personal use exceeds the greater of 14 days or 10% of the days rented at fair-market value. Expenses then need to be divided pro-rata between personal and rental use, and rental deductions can be limited.

If the property begins functioning primarily as a rental property, you’re entering another world involving depreciation, passive-activity rules, and potentially depreciation recapture when you eventually sell.

In short: a “second home” isn’t just one tax category.

Final Thoughts

A second home may turn out to be a mediocre financial investment and still be one of the best uses of your money.

Memory dividends are impossible to quantify. But if a second home creates weekends with your kids, brings friends and family together, and builds traditions that last – that’s a very real return.

And if one day you sell because life has changed?

Maybe the house simply did its job.

 

*Illustrative example only. Importantly, the ~$70,000 represents annual cash outlay, not true economic cost, since a portion of each mortgage payment reduces principal and builds equity. Actual costs vary significantly based on financing, taxes, location, insurance, maintenance, and other factors.