Second Home: Investment or Liability? Unpack the Hidden Costs Before You Buy

• A second home is often seen as an investment, but it behaves more like an illiquid business.
• Price appreciation for residential property has slowed, often barely beating inflation after costs.
• Rental income rarely covers EMI; residential rental yields are typically 2-3% annually.
• Tax rules are less friendly than perceived; only one house is self-occupied, others are deemed let-out.
• Liquidity is a major risk; property cannot be partially sold and selling takes time, negotiation, and often a price compromise.