The largest share of vacation-home purchases close from the fall to early in the new year, which is typically the offseason for primary home buying, said Danielle Hale, chief economist at Realtor.com. For instance, in the Lake Tahoe area, August and September are traditionally two of the busiest months of the year as buyers dream about spending the winter holidays in a new home, and sellers look to avoid having to maintain the property during the winter months, said Brit Crezee, a Realtor who specializes in that region.

Home prices soared during the pandemic in second-home markets such as Phoenix, Naples, Fla., Myrtle Beach, S.C., and Las Vegas, even more than the rest of the country. The typical property in second-home markets sold for $516,423 in April, up 19.9% from a year earlier, according to the latest data available from Redfin.

The beach house bonanza appears to be ending, many economists said. Sales of second homes are way down from last year’s boom, dipping below prepandemic levels (February 2020) for the first time in two years, due in part to high prices and rising mortgage rates, said Daryl Fairweather, chief economist at Redfin.

Many Americans still envision a second home as a source of family memories, wealth, rental income and tax benefits, if everything goes to plan. These buyers don’t always grasp the risks such as trouble renting the home, family squabbles over the property and unexpected costs.

“Vacation homes can quickly turn into nightmares if you don’t know how to properly manage them,” said Tony Robinson, a short-term rental investor and the co-host of BiggerPockets’ “Real Estate Rookie,” a podcast about real-estate investing for beginners.

Here are four of the biggest risks of buying a vacation home:

Don’t Bank on Rental Income

Tim Bauer said he quickly learned to prepare for the unexpected after he bought a ski cabin in Red Lodge, Mont., that he planned to rent out when he wasn’t using it to offset the costs.

While 2021 was a stellar year for rentals thanks to the pent-up demand due to the pandemic and remote-work arrangements, this year a massive flood in the region led to the cancellation of nearly all of the cabin’s bookings for June and July.

He lost about 20% of the annual revenue for the two-bedroom cabin that he rents for, on average, about $215 a night.

“It’s important to have a buffer of cash to be prepared for the slow times and unexpected events which can cause demand to slow down or even stop completely,” he said.

Mr. Bauer, a financial planner, keeps a separate checking account for the cabin with a cushion of about three to four months of expenses.

Relying on the rental income to pay mortgage and other costs can be risky for other reasons, too. Local rules for short-term rentals can change. Darin Eppich, a real-estate agent in Los Angeles, recently had a client decide against purchasing a vacation home in Palm Desert, Calif., when he learned the city had strict rules limiting short-term rentals.

The Lake House Might Start a Family Feud

Many vacation homeowners want the property to remain in the family for generations and picture scenes of relatives coming together at the house long after Mom and Dad are gone.

But not all family members feel equally invested in that vision and they may have no interest in keeping the property, said Pam Lucina, chief fiduciary officer for Northern Trust Wealth Management.

Ms. Lucina has clients where family members debate about how to share expenses and who gets to stay in the house during the prime weeks of the season.

“This becomes a huge source of conflict,” she said.

Create guidelines before there is tension, including a plan for how the property will be managed after the original buyers pass away, said Ms. Lucina. Ask your intended beneficiaries if they want the property and if they have the resources to pay for maintenance, taxes and other costs, she said.

Hidden Costs Lurk

Always budget for surprise expenses.

Jeff Barens has owned vacation homes for the past decade with his wife, Kristi Barens. The couple bought a rental house in Jackson Hole, Wyo., last summer. A few days before closing, they learned that to qualify for fire insurance, they’d need to make expensive changes to the home including a new roof and improved landscaping.

“It’s the things you can’t control that can have a significant impact,” he said.

Jamie Lane, vice president of research at vacation-rental research company AirDNA, typically recommends that hosts reserve 5% to 10% of the home’s annual rental revenue for unexpected expenses, which can include pipes, water damage and new roof. The percentage they need to save typically depends on the age of the property, he said.

Your Return on Investment Isn’t Guaranteed

Karen Altfest, a financial planner in New York City, recommends clients spend no more than 15% of their net worth on the value of a vacation property to help reduce their financial stress.

Sam Dogen, creator of the Financial Samurai website and author of “Buy This, Not That,” said people need to understand that their property may not appreciate as much as they expect, especially in the current market, where some experts expect prices to slide.

Mr. Dogen bought a two-bedroom condo in Lake Tahoe for about $715,000 in 2007. The asking price was $810,000, so he thought he was getting a deal. However, the property ended up plummeting in value by about 40% over the next several years due to the financial crisis.

Today, the property is still worth less than what he purchased it for, he said.

“It was a poor investment,” he said.