Vail Daily column: What are downsides to owning a second home? |

Vail Daily column: What are downsides to owning a second home?

Joan Harned

Dear Joan,

My financial adviser is trying to talk me out of buying a second home in the Vail Valley. He says there are lots of economic downsides to owning a second home, here or almost anywhere. I am looking at properties in the $1 million to $2 million range and thinking that we will have it rented by a management company whenever we are not here. I don’t know that I can argue successfully with my adviser who is a friend as well as the manager of all of our investments. I realize that it is ultimately my wife’s and my decision what we do with our money, but I would like to know what you can honestly tell me and if you have anything I can say to justify this purchase?

Dear Almost a Second Homeowner,

I cannot say that your financial adviser is wrong, as there are several things to consider, and some of them are negative. However, he is not looking at the whole picture, in my opinion. Let’s try looking at both sides of each issue:

One, in general, owners of higher end homes do not “make” money on their rentals. They are, however, often able to defray all or most of their expenses, HOA fees and taxes, with their rental income. If you have been renting in the valley for many weeks each year, then you will save even more money. Plus, your enjoyment will grow exponentially because you can picture yourself there all of the time and it will always feel like you’re “coming home”. (Please have your Realtor give you a couple of names of short-term rental management companies and they will happily look at a property you are considering buying and give you an estimate of the rental income throughout the year. Then you can make a more informed decision.)

Two, if you are prone to getting restless or get tired of going the same place several times a year, and you think there will be long periods of time you will not use this property, it probably makes less economic sense to purchase. But if you and your whole family love coming here in the summer and winter and it becomes a wonderful gathering place for all of you, then it is a priceless investment.

Three, if you are looking at this purchase mainly as an investment, your adviser is right, there are probably other purchases in real estate that are more of a sure thing for passive income. Yes, there has been some great money made on real estate in this valley, but it has mainly been through speculation/appreciation, rather than monthly income. Is this a good time to purchase property in your price range based on great appreciation in the near future? No, no guarantee in the immediate future. Is this a great time to enjoy the money you have earned and start enjoying life in one of the most beautiful place in the world? Yes, absolutely, you cannot start too soon. No one is promised tomorrow, so have your Realtor help you find the best property you can for your wants and needs and start enjoying it as soon as you can.

Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at, 970-337-7777 or