Second home investment is no longer the prerogative of Rich and Famous only.
It is the most sensible and sound investment advice chalked out for the millenials. Competitive
pricing coupled with quick escalation returns has made second home investment a most
preferred choice for securing the future. More and more real estate investors are turning to
their second homes to boost their financial stability.
A second house can be advantageous in several ways.
Appreciating Rental Revenue –
With the promise of rental returns , one can easily pay off the current EMI without dipping into
other personal treasures. This way, the burden of loan taken for the second home is almost nil.
Remember that when real estate prices rise over time, your second property’s rent will also
climb, providing an even better return on investment.
A Sound Investment –
Investments in real estate typically yield more significant returns than those made in other types
of assets.Purchasing a second house is a safer investment because the increase in property
value cancels out the increase in inflation. Additionally, if a financial emergency arises in the
future, you can sell the second home to cover the necessary debts.
The only Escalating Asset –
Unlike other investment options, only the value of real estate and yellow metal appreciates per
day without any major fluctuations. Share market investment may seem a more lucrative option
then real estate investment but it is riddled with uncertainty and volatility. Rest all of the long
term assets tend to depreciate with every passing day and lose their values on a daily basis.
Property price growth will produce Profitable Results –
A house purchased in a sparsely populated location right now can be a solid option, as most
societal development is moving towards the fringes of cities. Based on the forecasting studies,
buying a 2nd home at non-prime locations TODAY is sure to generate more income
TOMORROW when the rapid city development turns the same locality into a prime area.
Tax Benefits Galore –
In India, to promote more real estate investment culture,a second home loan comes with some
tax benefits. Section 24B permits tax reductions on home loan interest rates paid to service the
loan, and Section 80C hands tax savings on the principal amount rate. Taking advantage of the
said scheme is the wisest decision.
Multi-Purpose Usage –
A second home can serve its purpose in many ways. Apart from renting out, it can be used by
your children while pursuing higher studies. It can be let out to your old parents who wish to stay
separately but within your vicinity. One can also convert it as an office for WFH purposes.
To conclude, one solid real estate investment is any time more preferable and reliable than too
many small value investments. However, one must be aware and fully knowledgeable about
crucial factors like debt-to-income ratios, as one should have enough money to pay the
mortgage before risking it. Avoiding household leases for second homes can cut out the risk
factor completely.
Rest apart, it’s an excellent opportunity to invest in second homes.
