For generations the second home was a given for wealthy families. A place at the Cape, a ski house in Vermont, a warm-weather condo in Florida. It was as woven into the estate plan as the investment account. A marker of arrival, and a place to return to.
What we are seeing now, increasingly with ultra-high-net-worth clients in particular, is a deliberate move away from that assumption. People who can absolutely afford a second property are choosing not to own one. That is a fascinating shift, and worth paying attention to.
The Numbers Are Rarely What People Expect
When clients actually sit down and run the carrying costs on a second property, the honest total tends to be a surprise. Mortgage aside (and many of these buyers are paying cash) you are looking at property taxes, insurance, maintenance, property management fees if you are not there year-round, utilities, HOA dues where applicable, and capital improvement reserves. In coastal markets especially, insurance alone has become a material line item that looked very different five years ago.
Divide those annual costs by the weeks the property is actually used, which for most families is fewer than they anticipated when they bought, and the effective cost per week of enjoyment is often well above what a comparable rental would run. The equity upside is real, but it depends on appreciation, timing, and a clean transaction. None of those are guaranteed.
There is a counterargument worth addressing: if the property sits unused for stretches of the year, rent it out. Offset the carrying costs. Let the asset work. It is a reasonable idea in theory, and for some owners it pencils out. But in practice, most ultra-high net worth families have no interest in managing rental logistics, coordinating turnovers, or sharing a space they bought for privacy and refuge. The math may work on paper. The reality is that very few of them actually do it, and the ones who try often stop after a season or two – which brings us to the topic of ownership being a J-O-B.
Ownership is a Job Most Buyers Do Not Anticipate
This is the cost that does not appear on a balance sheet. Contractors. HOA correspondence. Insurance renewals. Tax filings in a second state. Coordinating access when you are not there. Making sure the pipes did not freeze. For clients whose time is genuinely scarce, this overhead compounds quietly but consistently.
I have spoken with clients who describe feeling tethered to a property – obligated to use it even when their circumstances or preferences have shifted, because selling feels like a failure after everything they put into it. That emotional weight is real, and it is not something anyone factors into the purchase decision.
What Strategic Renting Looks Like for High Net Worth Families
The shift is not about giving up access to places you love. It is about decoupling access from ownership. High-end rental markets in most desirable vacation destinations are deeper and more sophisticated than they were even ten years ago. Fractional ownership programs, luxury rental platforms, and membership-based access models give families real flexibility.
Here is what really stands out to me – A $1M second home in a competitive vacation market is not just a purchase, it is a deployment decision. That capital is no longer liquid, no longer invested, and no longer working. It is absorbed into a single illiquid asset, accumulating carrying costs year over year, and waiting on an appreciation cycle that may or may not align with your timeline. The opportunity cost is real and specific: that same $1M deployed into income-producing assets is generating current return every quarter, not hypothetical future appreciation. For families who already carry meaningful real estate exposure in their primary residence, a second property often increases concentration risk at exactly the moment a financial plan should be moving toward diversification. Renting your vacation destination does not do ANY of that.
This is not the right answer for every family, and there are of course exceptions; 1) If you truly use a property to its fullest, 2) if there is genuine multi-generational attachment to a specific place, or 3) if the estate planning implications of holding that real property are favorable given your structure, ownership may still make sense. But the reflex assumption that buying is always the better move deserves real scrutiny, and for a growing number of high-net-worth families we work with, the math points somewhere different than it used to.
If this is a conversation you are having, or one you have been putting off, we are happy to think through it with you.
