I’m Gigi M. Knudtson, and for more than a decade I’ve worked closely with property owners, developers, and legal teams involved in high-value residential projects in destination markets. In my experience, buyers often focus on the lifestyle first and only later discover the financial, tax, and regulatory realities that shape long-term satisfaction with a second home.
This guide explains what “second homes in resort communities” really mean in practice: how ownership works, what it costs, how taxes and laws differ by state, and what to evaluate before you commit.
A second home is a residential property you own in addition to your primary residence and use mainly for personal stays. A resort community is a location where the local economy and infrastructure are built around tourism and seasonal residents—ski towns, beach destinations, golf and spa communities, or lakefront areas.
Typical attributes include:
From what I’ve seen, motivations usually fall into four categories:
A critical lesson I’ve learned is that second-home affordability should be measured annually, not just at closing.
Lenders usually treat second homes differently from primary residences:
If rental income is planned, most lenders still require you to qualify without counting projected rent.
Many resort communities allow short-term rentals, but local governments increasingly regulate them.
Common regulatory tools include:
Tax treatment and regulatory climate vary widely. Below is a simplified comparison of common patterns affecting second homes in resort communities. Local rules can override state norms.
If a resort property is attractive only because of rental income, I advise verifying the ordinance history of that town. Patterns of tightening regulation are often visible years in advance.By Gigi M. Knudtson, Founder
Most buyers choose one of these:
Resort real estate historically shows strong emotional demand but uneven financial performance. Owners who succeed financially usually plan for long holding periods and treat rental income as a supplement rather than a guarantee.
Legally and for tax purposes, it depends on usage. If you rent it frequently, tax authorities may classify it as investment property.
Mortgage interest may be deductible under federal rules, but state benefits like homestead exemptions usually do not apply.
Yes. HOA governing documents often restrict or prohibit rentals regardless of city law.
Yes. Lenders require it, and many HOAs mandate minimum coverage.
Not consistently. Prices fluctuate more sharply with tourism cycles and economic conditions.