5 Reasons & 4 Parameters For Buying A Second Home

12 Mar 2021

KEY OBJECTIVES of 5 reasons & 7parameters for buying a second home

This blog article aims to provide insights on the below aspects related to 5 reasons & 7 parameters for buying a second home:

Advantages of buying a second home
How to make the most out of investment in a second home?
The biggest justification for buying a vacation home?

Investing in any type of land or property has its benefits, the most important of which are consistent income, long-term financial security, tax benefits, mortgage payments, and price appreciation over time.

What’s more, the land is always a good investment to make because it can serve as a perfect backup for liquid cash if needed in the long run.

5 Reasons For Investing In A Second Home

A Major Investment

Real estate is an opportunity that will appreciate and give you higher returns than any other asset class over the years. So, investing in a second home, along with investing in fixed deposits, mutual funds or gold will earn you rich returns in the long run.

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Serves as a home for retirement

Many people in the city have this dream of buying a house for retirement. It’s a good idea to invest in a second home, particularly in your native town. Even if you don’t intend to live there, it can provide you with a source of income for rent.

Payment advantages

If you have invested in another house, you are likely to have multiple tax advantages on the same property. The payment of interest on your home loan would help save your taxes.

There are no limitations on the number of properties that a person can own and there are no limits on the same lines that a person can use a loan facility at the same time. So if he chooses to purchase a second house, there are many tax advantages that an individual can use.

Holiday Home Rentals

You can turn it into a holiday home, and receive rental income from it if you intend to invest in a property in an off-beat area, away from the city.

One of the most sought-after locations to invest in a second home, especially Kolkata, is Rajarhat. The reasons for these are a nice and cool environment, well-developed infrastructure, and suitable budget-friendly property deals.

Also, numerous government projects are in place to build roads and roadways for smooth transportation, making it easily accessible. So it is a great idea to invest in this place for a second home.

Diversified Portfolio

Hedging of risk is an important parameter that every investor keeps in mind. Fixed Deposit, Shares, Mutual Funds, and Property options should be wisely mixed for having a diversified portfolio.

4 Parameters To Make The Most of An Investment In A Second Home

There is more to only getting the urge and the availability of money to buy a second house. Consider the following points if you are assured of buying a second home:

What is the intention of your second home purchase?
To have an understanding of the real estate industry, speak with good and well-established real estate companies/consultants.
Investing in a region that is a developing location, rather than an established locality, is always pleasant. This is because, as price inflation will be greater, it will give you double the returns. A top priority should be the location, unit size, and growth of infrastructure.
What’s the biggest justification for buying a vacation home? Investment or profits for rent?

Earlier, before the idea of RERA/HIRA and GST, people used to invest only from an investment point of view in another land. But the investment scene has changed over the years, with RERA/HIRA and GST coming into the picture. It can produce income in the form of rentals, with the capital value of second homes growing gradually.

This has a triple advantage of:

It will take care of expenses for repairs.
Secondly, it will add up to one’s savings as well.
It also helps the consumer to have a diversified and strong portfolio of investments.

SUMMARY

Investing in a second home offers steady income, long-term financial security, tax benefits, mortgage payments, price appreciation over the years. Second-home can provide a source of income for rent. It can also serve as a home for retirement. One of the most sought-after locations to invest in a second home, especially Kolkata, is Rajarhat. The reasons for these are a nice and cool environment, well-developed infrastructure, and suitable budget-friendly property deals. The payment of interest on your home loan would help save your taxes.

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