Beware: 'Great' Condo Deals Bring Other Fees

And the condo's association fee will pay for all the landscaping, road maintenance, beach cleaning, exterior painting and security costs, and sometimes even the garbage pickup and cable fees. With a single-family home you'd face all those costs on your own.

But with a single-family home, you have more options. If money is tight you can play less tennis for awhile, take care of the lawn yourself and postpone the paint job for a year or two. With condo fees, you won't have that flexibility.

Fall too far behind on fees and dues and the condo association can foreclose. Or, if other condo owners fall behind, your fees could be raised to keep the place going. If more than 15% of the community's owners default, most lenders will deny mortgage applications in the community, dragging down prices.

On the plus side, your vacation condo may earn a tidy rent if you don't use it all the time. Your mortgage interest payment would be tax deductible, and you could write off other expenses, including association fees, for the periods the property was rented out. Rent, of course, would be taxable income. And to get the maximum tax deduction on expenses, you would have to limit your own use of the property to just a few weeks a year.

This doesn't mean a second home cannot be a good deal. Prices and mortgage rates are indeed very low. But, given all the other costs, a second-home purchase makes sense only if you are in love with the property, intend to keep it for the long term and have a large financial reserve in case costs rise and rental income isn't as high as you'd hoped.