Hidden Costs of Owning a Second Home You Must Know

19 December 2025

So, you're thinking about buying a second home? Maybe you've been dreaming of weekend getaways by the beach, cozy mountain retreats, or even a charming place to escape the chaos of city life. Second homes sure sound like a slice of heaven, right?

But here’s the thing: owning a second home isn't just about BBQs on the patio and sipping coffee with a view. There’s a whole layer of hidden costs lurking beneath the surface—costs that can sneak up like a mischievous raccoon rummaging through your trash.

Don’t worry though! I’ve got your back. Whether you're eyeing a vacation home or an investment property, this guide will walk you through the lesser-known expenses of owning a second home so you can go in with your eyes wide open—and your wallet prepared.

🏠 Is a Second Home Really Worth It?

Let’s start with a gut check. Why do you want a second home?

If it's purely for vacations, renting might actually make more financial sense. But if you’re thinking long-term investment, a place to retire, or consistent rental income—then it can be a smart move. Just make sure you're not only seeing dollar signs or Instagram-worthy sunsets.

Because those sunsets? They come with plenty of clouds… like surprise costs and year-round responsibilities.

💸 Down Payment and Mortgage: Not Your First Rodeo

Buying a second home is like going back for seconds at the buffet—only this time, the price tag might be steeper.

Hefty Down Payments

Unlike primary residences, lenders typically require at least 10–20% (and sometimes up to 30%) down for a second home. Why? Because it’s riskier. You already have a mortgage, so banks get a little nervous making you a second borrower.

Higher Interest Rates

Yep, the mortgage interest rate on your second home is usually higher than your first. It’s like the bank saying, “We believe in you… but just a little less this time.”

Stricter Lending Requirements

Expect more paperwork (ugh), better credit scores, and stronger debt-to-income ratios. The lender wants to know you're financially stable enough to juggle two homes without dropping the ball.

🧾 Property Taxes: The Government Wants Its Share

Now, let’s talk taxes—because Uncle Sam never skips a meal.

Property taxes on a second home can be significantly higher than those on your primary house. Some municipalities even classify second homes differently and slap on higher rates.

And don’t forget: tax exemptions you might enjoy on your first home—like homestead exemptions—usually don’t apply to a second.

Tip:

Before buying, research how property taxes work in the area where you’re planning to buy. It’s better to cry now than later when your bill shows up in the mail.

🧹 Maintenance and Repairs: Out of Sight, Not Out of Mind

Here’s the classic trap: people think, “I’ll only visit a few times a year… so maintenance will be low.”

Wrong.

Even if you're not living there full-time, your second home still needs TLC. And if it’s sitting empty for long periods? You may actually need more maintenance to deal with things like:

- Mold and mildew
- Water damage
- Rodent or pest infestations
- Lawn and garden upkeep
- Weather-related wear and tear

And unless you’re a DIY wizard, you’ll probably need to hire someone to handle repairs—especially if your second home is far away.

🧑‍🔧 Property Management or Caretakers

If you're not nearby, who checks on your house?

Hiring a property management company or caretaker is a common solution. But guess what? That peace of mind comes with a price tag.

Average monthly cost: $100 to $300+, depending on services. If they’re managing renters too, they’ll usually take a chunk of the rental income—10% to 30% isn’t unusual.

Still thinking, “I’ll just pop by once in a while”? Let’s be honest. Life gets busy. And emergencies? They don’t wait for your long weekend plans.

🏥 Insurance: Twice the Coverage, Twice the Cost

Insurance on a second home often costs more—sometimes a lot more.

Why? Because risk factors increase when:

- The home is unoccupied for long stretches
- It’s in a flood, fire, or hurricane-prone area
- You plan to rent it out

You’ll likely need:

- Homeowners insurance
- Separate flood and fire insurance (depending on location)
- Liability insurance, especially if renting

Some insurers consider second homes “vacation” or “seasonal” properties, and that changes everything on the policy. Translation: higher premiums.

🪟 Furnishing and Decorating: Starting From Scratch

Unless you’re magically teleporting furniture from your primary home, you’ll need to furnish your second property. Even modest décor costs can add up fast.

Think:

- Beds, sofas, tables, chairs
- Towels, linens, dishes, cookware
- TVs, internet setup, and even Netflix subscriptions

You might convince yourself you’ll buy “just the basics.” Famous last words. Before you know it, you’re scrolling through Pinterest, trying to match beachy decor or rustic cabin vibes.

📅 HOA and Condo Fees: A Monthly Surprise

If your second home is in a community with a homeowners association (HOA) or a condo board, expect monthly fees.

These can range from $100 to over $1,000 per month depending on location, amenities, and maintenance needs.

And here’s the kicker: these fees often increase annually. Plus, there could be special assessments for big-ticket repairs like roof replacements or structural updates.

🧾 Utilities and Services: Bills Don’t Take Vacations

Even if you're not there full-time, you're still on the hook for:

- Electricity
- Water and sewer
- Garbage collection
- Internet and cable
- Security systems

Some of these can be paused or adjusted when the home isn’t in use. But you'll still pay base charges, minimums, and possibly seasonal spikes (hello, heating a mountain cabin in winter!).

🧳 Travel Expenses: Getting There Isn’t Free

Unless your second home is just down the road, travel is another recurring cost nobody thinks about… until they’re stuck in traffic with a drained gas tank or booking another pricey weekend flight.

Add it up: Gas, airfare, car rentals, tolls, wear-and-tear on your vehicle, time off work—it all counts.

If visiting your second home starts to feel like an expensive chore, that dream can sour real quick.

🏡 Rental Income Reality Check

Planning to rent when you’re not using the place? That’s smart… but tricky.

Sure, short-term rentals (Airbnb, VRBO, etc.) can bring in solid cash. But don’t forget:

- You may need a business license
- Local zoning laws may restrict short-term rentals
- You'll owe income taxes on rental profits
- Cleaning and turnover costs aren't cheap
- There's bound to be wear and tear

Plus, vacancy periods are inevitable. So if you’re banking on rental income to pay the mortgage? Tread carefully.

⚖️ Capital Gains and Tax Implications When You Sell

Here’s a hidden cost that hits later—when you sell.

You usually don’t get the same capital gains tax exclusion on a second home as you do on a primary residence. That means you could owe taxes on any profit from the sale.

Let’s say you bought it for $300K and sell for $500K. That $200K gain? Potentially taxable (unless you convert the home into your primary residence for a certain period).

Always talk to a tax pro. The IRS doesn’t mess around.

🔎 Bottom Line: Know Before You Buy

Owning a second home can be amazing—but only if you go in eyes wide open.

It's not just about the purchase price. It's the upkeep, taxes, insurance, travel, and a dozen other expenses you might not have considered. Plan carefully, budget realistically, and leave some wiggle room for the unexpected.

And if the numbers don’t add up? Renting for the weekends or taking more adventurous vacations could be just as satisfying—with a lot less stress.

💬 One Last Thought

Ask yourself, “Do I want to own this house—or do I want to use this house?”

Because owning is responsibility. But using? That’s freedom.

A second home can be a blessing or a burden. Knowing the hidden costs helps you decide which one it’ll be for you.