Introduction
Being a part of a beautiful home is everyone’s dream. Isn’t it? But are all such fantasies limited to enjoying just one home? You keep doing a host of investments, but have you made sure that it is a profitable investment? Buying a second home is a viable option as it provides a regular source of income and security during the sunset years. Buying a second home has emerged as a popular financial decision since real estate is known to increase in value over time. So going for a second home investment, can be very fruitful.
Here are some quick insights that will help your decision to go for a second home investment.
Rent Profits :
Investing in a second home can be as advantageous as your first property. Whether you are buying it as a form of investment or to secure your future. A regular income is vital, but real estate provides a simple and easy way to finance life after work. Income from a rental property can also act as a hedge against a low interest rate environment and future inflation.
Ease in Paying the EMIs:
Investing in a property like a second home is a win-win option as the rental income can be used to pay the monthly EMIs of a home loan. Second home investment eases the burden of saving up a part of your salary to pay the EMIs. And once your home loan is paid off, the rent turns into income that appreciates over time.
In most cases, the value of your property increases over time, so does the rent, while most of your costs remain the same. Therefore you can go for the second investment and remain stress free. Renting out your second home will generate a fixed income, while the value of your property normally appreciates over time. The income can not only add to your savings, but it can also take care of the property tax, maintenance costs, and other expenses.
Tax Savings:
Making a second home investment also comes with the additional incentive of tax savings. Under Section 80C of the Income Tax Act, taking a home guarantees tax savings on the principal loan amount. The more interesting fact here is, the interest paid towards the loan also entitles you to tax deduction under Section 24B. When buying a second home, you can avail a tax deduction of up to Rs 1.5 lakh on the principal and Rs 2 lakh on interest payment under Sections 80C and 24B respectively.
Save it for Future:
Immovable assets are a great backup resource. If you want to start a new business or arrange funds for your children’s education, then this can help you. A second home investment would give you a quick monetary solution. It is important to remember that the credibility of the builder will play a vital role while considering selling your home. Not only will it guarantee a high quality construction, but it will also speedup the rate of property appreciation. These are the major factors that contribute to the resale value.
Physical Form:
Second home investment exists in a physical form. You can touch and feel it. Thus, it gives an emotional and mental assurance that the owner had invested the money instead of spending it.
An Umbrella after Retirement:
After decades of working tirelessly like a machine, living in a home away from all the buzz would be the best way to retire. A home amidst the beauty and pampers of nature is something your post retired self would crave for. Its never too late to connect with the senses of nature and get lost with it. Having spent a considerable amount of time amidst the city’s hustle, the post work phase certainly demands a getaway, away from all of these. Therefore, a second home investment in is an absolutely profitable idea for you and your family.
Consider the Following Points Before Making the Investment :
- It’s advisable to buy a second home at least 10-15 years before you stop working so that you can pay off the home loan comfortably. Also, carefully evaluate how this decision will impact your overall investment portfolio and long-term financial plan.
- To attract tenants, make sure to invest in a property that is located around a sound social infrastructure with schools, hospitals and retail centres. It also helps to stay close to your investment home to watch over your property and be available to the needs of the tenant.
- Remember that even as rents rise over time so do maintenance bills of your second home. Also, factor in times that you are without any tenant for your property.
- To minimize your risk and generate highest returns, seek the help of a property consultant to help you make the right choice for a second home investment. Their market knowledge and network can help you choose the right property and find tenants.
So, what are you waiting for? If you have been wanting to make a second home investment, then this is the time to do it. Protech Group currently has two under construction properties:
Invest today, and grab the best out of it.
