Is buying a second home a good investment in India? This is one of the questions we often get asked. According to a recent survey by Savills India, a global property consultancy firm, a whopping 70% of homebuyers are interested in purchasing a second home priced at Rs 2crores or less.The survey that was carried out during June-July, 21 also indicated that about 60 percent of the respondents were interested in investing in a second home in a gated community as it offers security and they get to enjoy varied facilities like a swimming pool and sports amenities without having to deal with the bother of maintenance all by themselves.
Pre-launch projects are a favourite among homebuyers when it comes to buying a second home. There are several benefits that one gets to reap when investing in a pre-launch project. It is the only phase of construction where you get to buy your dream home at the lowest price possible. Apart from this, you also have the freedom of choice and the capital appreciation is higher. You must be well-aware of the documents to check before buying pre-launch projects in Bangalore. But there are other things to consider as well when you are investing in a second home. To know what they are, read on!
- Ask yourself why you want a second home
This is a very important question that must be answered. A second home cannot be something that is an impulse buy. You should know if this investment fits into your overall portfolio. Are you looking for a weekend getaway or a retirement spot or is it an investment move? If you are looking at it as an investment, the returns may be low but it gets better with time as the rental value and overall value increase.
- Budget
Calculate your budget and plan accordingly so that your second home doesn’t harm your financial strength.
- Location
Do your due research and invest in the best place for a second home in India. Location is a key factor when it comes to measuring the property’s appreciation potential. If, investment is what you are looking for, ensure that your home is well-connected to all amenities and entertainment facilities. This, in turn, would help increase demand for your home later on. If it is meant for a getaway or a retirement home, a residential project in Electronic City would be best suited mainly due to the peace that the area offers.
- Return on Investment
This has to be taken into careful consideration. Homes in commercial areas are known to provide a higher ROI than the ones in secluded areas. Projects near Electronic City are well-connected to all major transport networks and amenities yet far away from the hustle-bustle of the city. This is why they are considered as the best place for a second home in Electronic City.
- Tax Benefits
Remember to track the tax benefits available on your second home. Your total taxable income can be reduced by claiming the interest paid as an expense accrued from the rental income along with the standard deduction for monthly expenses. As the yield increases, your home will turn into an appreciating asset which can produce an inflation-adjusted income.
