Second-Home Economics: The Real Cost of the House You Visit

A second home is a promise to yourself: the terrace in August, the ski chalet at Christmas, the city apartment for long weekends. But a house you use a few weeks a year still costs money every day of the year. Before you fall for the view, build a clear picture of what the home will cost to own, run and, one day, sell.

The costs that never take a holiday

• Property taxes and local charges, which can rise over time.
• Building service charges or estate fees, especially high in branded or full-service properties.
• Utilities, security, gardening, pool care and cleaning, even when the home is empty.
• Maintenance and repairs: sea air, snow and heat all age a property faster.
• Furnishing and refreshing the interior every few years.

The second home you can afford to buy is not always the one you can afford to keep.

Renting it out: the rules come first

Many owners plan to rent when they are away. Cities and buildings increasingly restrict that. In New York, Local Law 18 bars renting a whole apartment for fewer than 30 days, and Paris tightly regulates short-term lets, especially of homes that are not a main residence. Condominium and co-ownership rules can add their own limits. Check the rules for the exact address, not the city in general, before you count on income.

Insurance and management

Ask whether the policy covers long periods of vacancy, natural hazards such as hurricanes, floods or wildfire, and rental use. In some coastal markets insurance is a significant and rising cost. If you will not be there, a management company or caretaker becomes essential; ask what their fee includes, how they report and who holds the keys.

Questions to ask before signing

• What did the property cost to run last year? Ask for actual bills.
• Are short-term or long-term rentals allowed at this address, and under what registration?
• How will rental income, the property itself and a future sale be taxed, locally and at home?
• How do local inheritance rules treat foreign owners?
• Speak to a licensed lawyer and tax adviser in both countries; this is not legal, tax or investment advice.