Facts to consider while buying your second home
Buying a second home has become one of the fastest growing trends across India. Majorly in the metros, more than 10 millions are expected to enter the second home market within the next decade. You would have already got exhausted buying your first home. Repetition of the entire scene could seem too tiresome to you but with a few essential points in mind, you can learn how to turn buying your second home into a sane, reasonable and profitable venture.
Expense vs. Return
It is true that a second home might add to your annual expenses but then there are many more advantages to it than disadvantages. Investing your money in a home is a much beneficial plan than saving it in a bank or investing it in bonds, though you might end up paying the personal property taxes but at the end of the day the property might just yield you huge profits. It serves as a backup for your hard times. You can also put it out on rent or keep it as vacation home.
Evaluate the need of the property
The criteria to evaluate the need for a house depends on the reason for which it is being bought – as an investment or for self-occupation. The primary thing you need to be clear about is the manner in which this investment will fit into your overall portfolio. In the initial years, the yield from a real estate investment is typically low and only improves with time with increase in the rental income and value of the location. Therefore, this investment will not be an efficient way to meet the goals that require immediate payouts. It can be used to meet long-term goals, such as contributing towards your retirement income or to pay for the higher education of your children. Before you commit a large portion of your surplus each month to an investment that cannot be liquidated easily, you must make sure that you have adequate funds in investments that are suitable for your short- and medium-term financial goals.
Points to consider
There are a few other aspects that you might like to check before buying a second home, like the transport facilities, possibility of renting the house, condition of the house that you would be buying and the location of the property.
If all the above factors look positive in your case, then it probably is a good choice for you to go ahead for a second home. You can always get the house done with the things you have missed doing in the first one. That’s why they say, “The first is a memory, and the second is a desire.”
