Hehman | Rocky Mountain | Florida coast | hazard insurance

With the last stock market meltdown still a fresh and painful memory, real-estate prices on average have stayed reassuringly strong throughout. A third of second-home buyers tracked by the NAR in the early '00s cited the market tumble as a prime motivator for buying a second home as a more stable anchor for the family portfolio. And in quite a few instances, buyers are being tempted by the allure of earning a profit from vacation rentals.

But you can forget about any dreams of easy money.

Making a sensible investment in a high-end resort area these days can be virtually impossible, says Hehman. Boomers have been joining the second-home migration for years, and they've been bidding up the entry price at the hottest destinations every step of the way. Prices for a lot of those Rocky Mountain condos jumped into the mile-high category years ago. And after you consider Vail, the Florida Coast, and Maui - but X them off the list as priced way beyond most family budgets - there are plenty of unexpected places that can satisfy the itch for a second home (See "Affordable Second Addresses" below).

Planned right, getting the numbers to work over the long term is doable, especially as long as interest rates remain historically low. But finding a second home and arranging actual cash flow - so you're ginning more rental income every month than you spend for it - is a far trickier affair.

People start off on the wrong foot when they don't fully look at the math before they leap, says Hehman. If you need a mortgage - and 56 percent of the average buyers tracked by the NAR do - there's the monthly­ mix of principal and interest to tack on to the taxes that need paying. But there's also additional utility payments and ongoing maintenance. Buying a beach house? Great. Your biggest concern may be keeping it a secret from the relatives. But if you lie in harm's way, hazard insurance could take an annual bite equal to three percent of assessed value. Don't think you can afford a good property manager? Keep it real.