Why Do People Really Want a Second Home?
John Donlon, co-founder of GoldCoast Mortgage, has been arranging mortgages for Massachusetts families for decades. Over that time, he’s noticed a pattern in his client conversations so frequently that he feels obligated to mention it, even when it’s not strictly part of his job.
“I must know a hundred to two hundred families that maintain an out-of-state residence for the sake of vacationing,” he says. “They split their lives. They have the place where they raise their children and work, and they have an entire other lifestyle up in Maine or New Hampshire.”
These families have divided themselves into two. There’s the life they live, and there’s the life they’re trying to get to. Most of the time, the distance between those two lives is the source of the problem, not the solution to it.
If you’re struggling with the notion that you’d be happier somewhere else, here are a few of the concepts John Donlon thinks you should consider before you take on a second mortgage.
The Cost of Always Wanting to Be Somewhere Else
A second home might sound like a chance at freedom for nothing more than an extra monthly payment. But what it costs is often more than homeowners realize, and not just in terms of money.
You Can’t Get the Time Back
There’s a second set of neighbors to manage, a second roof to maintain, and another property to open and close every season (or, in some cases, every weekend). The commute alone adds up fast.
John estimates that families making the weekly trip north lose three and a half to four hours every single weekend behind the wheel. Over ten years, that’s a lot of one’s life spent on Interstate 93.
“It becomes an exhausting rat race,” John says. “If they had put that energy into where they were locally, they could have created a paradise and saved three and a half to four hours a week of commute time.”
That, of course, isn’t counting the hours spent managing property repairs, paying bills, talking to contractors, and making plans.
Most Families Can’t Afford to Pay (or Become) a Property Manager
The one thing that would make the second home genuinely manageable is someone else running it. A full-time property manager could handle the contractors, emergencies, and logistics, saving the family precious time that they can’t get back.
It’s a nice idea, but John puts that cost at around $250,000 a year, or more than $2 million each decade. Even some of the most affluent families in the Northshore area don’t have that kind of money to spend.
Naturally, the owner becomes the property manager. It’s an unpaid but necessary position, and it requires a significant amount of time and effort.
“I had a gentleman in my office who resents the second home,” John says. “Every weekend, he’s got to open it up, close it up, and he’s the only one who does the work on it. He’s just exhausted.”
If the man is spending hours managing the property, commuting to it, and shutting it down for the weekend, he’s sacrificing potential quality time with his family. They could be having a relaxing Sunday evening together. Instead, “They’re screaming back into town on Sunday night with trash bags full of laundry,” says John.
You Can’t Create Happiness by Trying to Out-Drive Your Problems
The impulse to buy a second home isn’t usually about preserving wealth with property, achieving a certain status, or even finding happiness. John believes it stems from the belief that “the good life” is always going to be somewhere else.
“Folks may think that looking externally for happiness is the most important thing, that what they’re looking for can only be found somewhere else,” John says. “But I’ve found that the happiness, the joy, and the enjoyment they are looking for are always internal. Those things are here already, if you know how to find them. Crossing a state line won’t bring you to them.”
Traveling from Empty Home to Empty Home
There’s also the experience of finally getting what you wanted, and finding it hollow. The quiet you were chasing in a vacation home may not always materialize, and happiness may not unfold the way you imagined.
Often, the home sits empty. According to a real estate industry study, most owners of second homes visit only 45 days annually, less than 13% of their time each year.
“Once you achieve the second home, you may realize it’s very empty, not just physically, but emotionally as well,” John says. “Whatever you were lacking at your home destination, you’ll be lacking up there, too, especially once you find out that your guests are only coming up to use your water ski boat.”
Taking Difficult Steps Locally Could Bring True Peace of Mind
John heard a story about a man who was bothered by his neighbor’s barking dogs. Instead of talking to his neighbor, the man went straight to the local zoning board and tried to get them to issue a citation based on a story he’d made up.
After that failed, he came up with a new “solution:” buying an airhorn and blasting it at the neighbor’s house periodically throughout the day.
Having a conversation may have been uncomfortable for both neighbors, but it could have resolved the situation. It could have even brought the neighbors closer together.
“There’s a curtain at the end of this journey for all of us,” John says. “It could be several decades away, or it could be in a month. If we’re actually aware of that curtain, and of the uncertainty of when it’s going to be drawn, are we really going to go out of our way to buy an air horn?”
Fixing What’s Driving You Away
Homeowners who recognize this issue might be tempted to start building, remodeling, and re-investing in their forever home to create that paradise. John suggests focusing on subtraction first, rather than acquisition.
“Subtract Before You Add”
Before you add anything to your home, figure out what’s pushing you out of it, then resolve it.
“If something is bothering you so much locally that you feel getting in a car and driving two hours will solve it, you’re not solving it,” he says. “You’re deferring it. You’re masking it. If you’re going to make your local residence your utopia, you have to address whatever is driving you away from it.”
It might be a neighbor we resent, a local business that makes too much noise, or even just a generally negative outlook on the community driving us away.
The problems usually fall into one of three categories. The house is cluttered or neglected. There’s a neighbor conflict that’s been left to fester. Or there’s a story attached to the place that makes it feel like somewhere you need to escape.
“If your house is too cluttered to unwind, unclutter it,” John says. “If it needs too much work to let you relax on weekends, address the work. If it’s a neighbor conflict, work on that relationship.”
Even if one views the community itself as the problem, there are usually plenty of ways to get active and work toward something positive.
A Rooster and a 300-Year-Old Farmhouse
To put things in perspective, John pointed to himself.
John lives in Danvers, Massachusetts, in a 300-year-old farmhouse with a rooster and eight direct neighbors. Every year, he asks them if the rooster is a problem.
None has ever complained. The conversation costs nothing.
Most importantly, “paradise” could be an old house in Danvers, because “paradise” is relative. It doesn’t have to be a lakehouse in the wilderness with a stunning view of the White Mountains.
“It could be an old farmhouse; it could be a historic home; it could be a condo in Somerville,” John says. “Building paradise could look like discovering new bike trails, getting to know your neighbors, or just improving your pickleball game. You could have access to so many things, but you’re choosing not to engage with them just because you don’t think Somerville can be paradise.”
Fix the Financing Too
If you’re committing to turning where you are into your forever home, your paradise, then the home’s financial structure matters as much as its physical one. Two financial products are worth mentioning here: Adjustable-rate mortgages (ARMs) and protective trusts.
ARMs Are a Short-Term Gamble, Not an Investment in a Long-Term Lifestyle
John is blunt about adjustable-rate mortgages. He compares them to electronic slot machines. They’re engineered to look winnable, but they are actually designed specifically to take your money.
“An adjustable-rate mortgage is tied to an alarm clock,” he says. “People don’t realize it, but when that alarm clock rings, they’re suddenly looking at casino odds. Even worse, an ARM has a spring-loaded feature that forces it up, even if rates are down.”
The mechanics are counterintuitive, even to accountants.
On a 5/1 ARM, the rate doesn’t gradually drift upward; it’s engineered to jump to the cap at the first adjustment opportunity.
“At payment sixty-one, your rate could go from 3.875% to 9.875% in a single step,” says John.
”Why put a very loud alarm clock on your kitchen island if you’re trying to set up a long-term lifestyle with some predictability? Don’t risk it all on a short-term financial product that can sting very hard.”
When to Shift Your Forever Home to a Protective Trust
The other financial issue John raises is protective trusts. The longer someone owns a home, the older they get, and the more vulnerable their equity becomes to nursing home liens and lawsuits above the homestead exemption.
Massachusetts has a five-year lookback on Medicaid. If a home is transferred into a trust within five years of entering a nursing home, those assets can still be reclaimed. The timing of the decision is everything.
“The forever home is ‘forever’ for the person living there, but also potentially for the family,” John says. “Getting it into the right ownership structure before the vulnerability shows up is key.”
What “Forever” Actually Means
John is assertive about his perspective on this topic, but he’s also careful to say he’s not in the business of telling people how to live.
“As a mortgage advisor, I can’t necessarily tell people they’re about to make a two-decade mistake. That’s not my role,” he says.
“But I’d be a little negligent if I didn’t share the lessons I’ve learned. Maybe that looks like investing in what’s local to make it more relaxing, and maybe paying your mortgage off early is a better option than committing to another.”
Many families have a very specific plan for what their “forever” will look like, and that plan could involve a second home. Ultimately, the word “forever” in “forever home” has always been a bit of a misnomer.
John acknowledged that at the start. Nothing lasts forever. But that’s not really the point.
“Make where you are the right place to be. That’s all that matters,” John says.
GoldCoast Mortgage is an independent mortgage brokerage serving Eastern Massachusetts. Contact us to discuss your financing options.