The best place to buy a second home depends on your investment objectives and lifestyle priorities. Home buyers seeking the best second home locations must consider both rental income potential and long-term appreciation.
Popular vacation destinations like North Myrtle Beach deliver strong returns for those purchasing a second home. Meanwhile, mountain retreats in areas like Asheville offer easy access to outdoor activities and a thriving housing market for vacation home buyers.
Finding the best place to buy a second home requires balancing mortgage rates, home price trends, and rental potential. Whether you plan to rent your property or use it part-time, the right location makes all the difference.
The U.S. holds approximately 5.7 million vacation homes, representing about 4% of total housing stock according to NAHB estimates. Florida alone accounts for nearly 16% of all investment property vacation homes nationwide.
Why Second Homes Are a Cornerstone Asset for Wealth Portfolios
For high-net-worth individuals, a second home real estate investment represents more than a lifestyle choice. It functions as a strategic investment property that diversifies your wealth portfolio beyond your primary home.
You should track home price appreciation alongside your other investments. Monitor real estate equity, mortgage payments, property taxes, and HOA fees as part of your total net worth.
See how your vacation home investment changes relative to your stock portfolio, crypto holdings, and other assets. Learn more about portfolio diversification strategies.
Financial Complexity of Multi-Property Ownership
Managing multiple properties requires sophisticated tracking for any second home investment. Investors must monitor mortgage rates, utilities, insurance, rental income from short-term rentals, and maintenance costs.
Lenders typically require at least 10-25% down payments for second homes. They also apply stricter credit requirements than for your primary residence. Prepare for higher mortgage payments and stricter debt-to-income (DTI) limits.
Second home mortgage rates run 0.5% to 0.875% higher than primary residences. Average 30-year rates range from 6.75% to 7.25% as of January 2026, significantly affecting monthly mortgage payments.
If you plan to rent your vacation home, a vacation rental property manager typically charges 25% to 35% of rental income, though full-service fees can reach 40%. Insurance premiums can also run two to three times higher than your primary home for investment property due to vacancy risks.
For HNWIs with international properties, currency fluctuations impact net worth significantly. Track assets with net worth tracking tools for home buyers purchasing a second home abroad.
Location Strategy: Balancing Lifestyle and Asset Performance
Consider properties within 2-3 hours of your primary residence for easy access and maximum utilization. Alternatively, target emerging markets for stronger long-term appreciation potential.
International second homes offer geographic diversification for your second home real estate investment. However, they require tracking across multiple currencies and tax jurisdictions.
Investment Intent: Personal Use vs. Income Generation
Rental income properties generate cash flow to track against your other passive income. Personal vacation homes provide lifestyle value while building equity in the housing market over time.
Many HNWIs pursue a hybrid model for their vacation home investment. They use properties personally during peak seasons and generate revenue through short-term rentals during off-season months. To accurately gauge the profitability of this hybrid model, investors often calculate their projected IRR for investments before purchasing.
Recent market analysis suggests that roughly 46% of second home owners rent their properties, while approximately 42% bought primarily for income generation.
Financial planning for these assets is critical. Annual maintenance costs typically run 1% to 2% of the home price. Notably, investor sentiment remains strong, with past surveys indicating that they believe their property will appreciate. Part-time use combined with rental income continues to make second home investment an attractive wealth-building strategy.
Current Housing Market Conditions for Second Home Buyers
The housing market presents both challenges and opportunities for home buyers purchasing a second home in 2026. Notably, demand has stabilized; mortgage rate locks for second homes are currently down 59.2% from pre-pandemic levels as high rates cool speculative buying.
Inventory continues increasing after years of historically low listings. Home buyers now enjoy more options and increased bargaining power in many of the best second home locations.
The U.S. median home price reached $446,000 in mid-2025. However, popular vacation markets command higher premiums, with typical homes selling for $589,000 compared to ~$438,000 in non-seasonal towns.
High-speed internet now ranks as the top amenity for the majority of second home buyers. Remote work capabilities drive purchase decisions for those buying a vacation home more than ever before.
Best Beach and Coastal Markets for Second Home Investment
Here is what you need to know: Coastal markets consistently deliver the strongest rental yields for vacation home investment. Target cap rates range from 7% to over 8% in the top-performing places to buy a vacation home.
Short-term rental revenue in the U.S. was projected to exceed $20 billion in 2025. Savvy home buyers should focus on properties with key amenities like hot tubs, pools, or water views to capture this demand.
North Myrtle Beach, South Carolina
North Myrtle Beach sits along the 60-mile Grand Strand, making it one of the best places to buy a vacation home. Atlantic-facing condos feature pools, hot tubs, and private beach access for family members and guests visiting your vacation home.
The average home price hovered in the mid-$300s as of late 2025, offering an affordable entry point. World-class golf courses attract visitors year-round, supporting strong short-term rental income for home buyers who plan to rent their second home investment.
Dauphin Island, Alabama
Dauphin Island delivers a barrier island experience with small-town charm for those purchasing a second home. Large coastal homes accommodate extended family members seeking Gulf Coast retreats in this popular vacation destination.
With strong rental demand, the 8.0% cap rate makes this Alabama destination attractive for second home real estate investment. Southern hospitality and competitive price points draw steady visitor traffic for home buyers buying a vacation property.
Okaloosa Island, Florida
Okaloosa Island occupies Florida's prized Emerald Coast for vacation home investment. White sand beaches and condo complexes dominate the vacation home landscape in this popular vacation area.
Florida claims approximately 16% of the vacation home stock in congressional districts nationwide. The state's tax advantages and year-round appeal continue attracting home buyers interested in second home real estate investment and long-term appreciation.
Premium Coastal Markets
Cape May County offers 30 miles of Atlantic beaches with Victorian architecture. Ocean City commands a median home price of $1.3 million, with over 51% of homes serving as second residences.
Kauai County in Hawaii features world-renowned beaches and whale watching. Maui median home prices often exceed $1.2 million, with 11% classified as vacation homes for part-time residents.
Best Mountain Markets for Second Home Investment
Mountain destinations offer year-round rental appeal among the best second home locations. Winter ski seasons and summer hiking create dual income streams for vacation home investment.
Remote work trends continue driving demand for mountain properties. Home buyers seek tranquil settings with reliable high-speed internet and easy access to outdoor activities.
Girdwood, Alaska
Girdwood stands as Alaska's only true resort town and a unique best place to buy a second home. Alyeska Resort offers the largest ski area in the state, surrounded by spectacular glacial peaks for family members seeking adventure.
The 7.2% cap rate rivals coastal markets while offering unique northern experiences for vacation home investment. Aurora borealis viewing attracts visitors during winter months to this popular vacation destination.
Asheville, North Carolina
Asheville combines Blue Ridge Mountain beauty with a vibrant arts and music scene for home buyers. Easy access to the Blue Ridge Parkway ensures steady tourist traffic for those who plan to rent their investment property.
Hiking, waterfalls, and craft breweries draw visitors year-round to this best second home location. The median home price remains under $500,000, offering accessible entry to mountain property ownership.
Luxury Mountain Destinations
Vail, Colorado commands premium home prices with 32.5% of Eagle County homes serving as second residences. World-class skiing, golf courses, pedestrian villages, and summer concerts justify the vacation home investment for part-time residents.
Park City, Utah hosts the Sundance Film Festival and two major ski resorts. Summit County shows 39.2% second home ownership, confirming strong interest in this best place to buy a second home among home buyers.
Nevada County, California
Nevada County emerges as a rising luxury ski destination near Lake Tahoe. Truckee serves as the most populous town in this rapidly developing housing market.
Year-round recreation includes skiing, snowboarding, and golf courses for part time residents. Significant development continues expanding options for those purchasing a second home.
Best Peace and Quiet Markets for Retreat Properties
Remote workers and retirees increasingly seek tranquil best second home locations for their vacation home investment. These housing markets offer natural beauty without tourist crowds or premium home price tags.
Whitewater, Wisconsin
Whitewater sits near Kettle Moraine State Forest as a compelling best place to buy a second home. Hiking trails, lakes, and dark skies for stargazing attract nature enthusiasts seeking long-term retreat options.
The $374,000 median home price offers affordable entry for home buyers purchasing a second home. Easy access from Milwaukee makes this retreat practical for part-time weekend use by family members.
The Berkshires Region, Massachusetts
The Berkshires blend green forests, mountains, and performing arts for vacation home buyers. Fresh food from local farms and peaceful hikes define this popular vacation region's appeal for second home investment.
Barnstable County shows 36.7% second home ownership. The ~$385,000 median home price provides value for Northeast home buyers interested in second home real estate investment for long-term appreciation.
Sierra Vista, Arizona
Sierra Vista translates to Mountain View in Spanish, delivering spectacular scenery for those buying a vacation home. More than a dozen observatories make this location ideal for astronomy enthusiasts.
The $280,000 median home price represents exceptional value for Southwest investment property. Prime birdwatching locations attract nature lovers throughout the year to this best second home location.
Best Urban Second Homes for Global Citizens
Urban vacation homes combine cultural attractions with easy access to business centers. These best places to buy a vacation home suit home buyers who prioritize walkability, dining scenes, and short-term rental potential.
Savannah, Georgia
Savannah delivers historic charm through cobblestone streets and Spanish moss-covered parks for vacation home investment. A scenic riverfront and 25-minute drive to Tybee Island beach add lifestyle value for family members.
The $324,000 median home price makes Savannah accessible for those buying a vacation home as their first second home investment. Southern hospitality extends to a welcoming short-term rentals environment in this housing market.
Charleston, South Carolina
Charleston combines subtropical climate with a renowned food scene for home buyers seeking second home real estate investment. The historic French Quarter and nearby islands like Kiawah attract upscale home buyers.
The $575,000 median home price reflects Charleston's premium positioning in the housing market. Easy access to ocean activities and year-round weather justify the vacation home investment for part-time residents.
Santa Fe County, New Mexico
Santa Fe ranks among the oldest cities in the United States as an exceptional best place to buy a second home. Pueblo Revival architecture and a world-class art scene with hundreds of galleries create unique appeal for those purchasing a second home.
The scenic desert landscape attracts artists, retirees, and creative professionals seeking vacation home investment. Rich history and cultural depth distinguish Santa Fe from typical popular vacation destinations for long-term ownership.
International Second Home Considerations for Global Wealth Portfolios
International properties add geographic diversification to your second home investment and vacation home investment portfolio. However, they introduce complexity in tracking assets across your primary home and primary residence jurisdictions.
Cross-Border Asset Tracking
Properties denominated in foreign currencies impact net worth daily for home buyers purchasing a second home abroad. Tracking mortgage payments, short-term rental income, and taxes across countries requires sophisticated currency-aware systems for second home real estate investment.
Tax Benefits and Legal Structures
Tax deductions for mortgage interest on second homes generally apply to up to $750,000 of combined qualified debtwith your primary residence. Under the "Augusta Rule" (IRS Section 280A), if you rent your vacation home for 14 days or less per year, rental income remains completely tax-free.
Estate planning for international real estate requires specialized expertise to navigate foreign inheritance laws. Ensure family members understand important financial information about all properties.
Popular International Destinations
Mexico, Italy, Spain, and Costa Rica continue to attract American home buyers for vacation home investment abroad. Holding real estate in EUR or GBP can also act as a hedge against dollar volatility for long-term investors.
Managing Second Home Assets Within Your Complete Wealth Portfolio
Spreadsheets fail when managing multiple properties across borders, currencies, and accounts. Manual updates cannot capture real-time home price changes, daily currency fluctuations, or mortgage amortization progress.
Seeing how your second home real estate investment performs relative to stocks, crypto, and other assets becomes nearly impossible with disconnected tools. Kubera solves this challenge by serving as the "single source of truth" for your entire balance sheet.
Comprehensive Portfolio Visibility with Kubera
Kubera is purpose-built to track high-value assets like real estate alongside liquid investments. It replaces static spreadsheets with a dynamic dashboard that updates automatically.
- Automated Home Valuation: Kubera integrates directly with market data to pull real-time estimated values for your properties, keeping your net worth figure accurate without manual data entry.
- Global Currency Support: For international second homes, Kubera tracks the asset in its native currency (e.g., EUR or GBP) and automatically converts it to your preferred portfolio currency (e.g., USD) using live exchange rates.
- Total Equity Tracking: Connect your mortgage accounts to see your true equity grow in real-time as you pay down debt and your property appreciates.
Secure Document Storage and Family Access
Owning multiple properties generates a mountain of paperwork. Kubera includes a secure Document Vault to store deeds, insurance policies, and title documents directly alongside the asset they belong to.
This ensures that critical information is never lost and remains accessible to family members or beneficiaries through Kubera’s unique "Life Beat" Dead Man's Switch, which ensures safe transfer of your financial information if you become inactive.
Collaborate with Your Financial Advisor
Sophisticated wealth portfolios require team management. Instead of emailing static PDFs, use Kubera to share a live, read-only view of your portfolio with your financial advisor, tax professional, or property manager.
This transparency allows your financial advisor or wealth manager to provide better guidance on tax strategies, refinancing opportunities, and portfolio rebalancing.
Get Started: Track Your Second Home as Part of Your Complete Net Worth
Stop relying on disjointed apps and outdated spreadsheets. Sign up for Kubera to see your complete financial picture—from vacation homes to crypto—in one secure, beautiful dashboard.
Join thousands of HNWIs and global citizens who manage their vacation home investment with clarity.
Start tracking your wealth portfolio today!
Frequently Asked Questions About Purchasing a Second Home
Is a second home a good investment?
It can be. Second home investment offers potential for home price appreciation and rental income. Owners may receive tax breaks for property taxes and mortgage payments interest, depending on usage patterns.
What is a capitalization (cap) rate?
A cap rate measures the annual rate of return on a vacation home investment or investment property. Calculate it by dividing net operating income by current market value. Higher cap rates indicate better returns.
What percentage of my net worth should be in real estate?
Many financial advisors recommend 25-40% of total net worth in real estate, including your primary residence and vacation home. Track holdings using net worth tracking tools for long term portfolio balance.
How do I track rental income from my second home?
Monitor gross rental income from short term rentals, property manager fees, and mortgage payments to calculate true ROI. Use IRR calculations to measure your second home investment performance.
Should I hold my second home in an LLC or trust?
Property ownership structures depend on liability protection needs, tax situation, and estate planning goals. Consult with a tax advisor and estate planning attorney to determine the best structure for your investment property.
How do I find a good property manager for my vacation home?
Look for a property manager with experience in short term rentals in your specific market. Check references, understand their fee structure, and ensure they can handle booking platforms if you plan to rent.
What are the best places to buy a vacation home for rental income?
The best places to buy a vacation home for rental income include coastal markets like North Myrtle Beach and Dauphin Island with cap rates above 8%. Mountain destinations like Girdwood also deliver strong returns.
