Owning a vacation home in Maine — whether it’s a cozy cabin in the woods, a lakeside retreat, or a coastal cottage — is a dream for many. But with changing market conditions, rising costs, and evolving personal priorities, more owners are beginning to ask the big question:
“Should I sell my Maine vacation home?”
It’s not a decision to take lightly. Whether your property is in Bar Harbor, Rangeley, Kennebunkport, or anywhere in between, here are the key factors to consider before putting your second home on the market.
1. Understand the Current Maine Real Estate Market
The Maine housing market has seen strong growth in recent years, particularly in vacation and second-home areas. Low inventory and increased demand from out-of-state buyers have kept prices competitive — but rising interest rates and inflation have started to cool things off in some regions.
Before you make any moves, consider:
- What are similar vacation homes in your area selling for?
- How long are homes sitting on the market?
- Is buyer demand still strong in your specific town or county?
2. Why Are You Thinking of Selling?
There’s no “one-size-fits-all” answer. Your motivation matters.
Common reasons for selling include:
- You’re no longer using the home enough to justify the upkeep.
- Rising property taxes or maintenance costs are becoming burdensome.
- You’d rather cash out while the market is still strong.
- You’re moving on to other investment opportunities or retirement plans.
- You’ve inherited the property and don’t want to manage it.
Understanding your “why” will help guide your “how.”
3. Costs of Keeping vs. Selling
Vacation homes come with hidden expenses — even when you’re not using them. These include:
- Property taxes (which are often higher for second homes)
- Heating, water, and utilities
- Insurance (including flood or coastal insurance if applicable)
- Regular maintenance and emergency repairs
- Property management or cleaning if you rent it out
Ask yourself: Is the home paying for itself through short-term rentals, or is it becoming a financial drain?
4. Tax Implications
Selling a vacation home can trigger capital gains taxes, especially if it’s appreciated significantly. But there may be ways to reduce your tax liability:
- If it was a rental property, you may qualify for deductions.
- If you’ve used it as a primary residence for a certain amount of time, you may be eligible for exclusions.
Speak with a real estate-savvy tax advisor before making a final decision.
5. Do You Have a Plan for the Proceeds?
If you sell, what will you do with the equity?
Some owners use the funds to:
- Buy another vacation home in a different location
- Pay down debt
- Invest elsewhere (stocks, business, or primary residence)
- Support retirement or lifestyle changes
Make sure selling fits into your bigger financial picture.
6. Could You Rent Instead of Selling?
If you’re not ready to fully part with your vacation home, consider renting it seasonally or year-round. Platforms like Airbnb and VRBO have made it easier than ever to turn your second home into a short-term rental — especially in high-demand Maine vacation spots.
This could provide passive income while still allowing occasional personal use.
Should You Sell?
There’s no “right” answer — only the one that fits your goals. If you’re rarely using the home, the market is still favorable in your area, and you could put the equity to better use elsewhere, selling could be a smart move.
On the other hand, if your vacation home holds sentimental value, provides rental income, or offers future retirement potential, it might be worth holding onto.