Buying a second home has increased throughout the pandemic period. The adoption of work from home lifestyle encouraged the home buyers to buy their second home in the city outskirts. If you are thinking to invest in a second home here are few reasons to ensure that you are doing the right thing.
- Seamless income source – Buying a second home helps you get a lifelong income from rentals as you are already living in your first home and you can easily rent out the second one to various websites like “Air-BNB” or “make my trip” if you wish to keep it to yourself whenever you want or rent it for full time if you need a steady monthly income.
- Tax benefits – You could buy a second home to use it as a holiday home, or an investment or even to diversify your portfolio. Whatever the reason, it does not become a stressful affair for you. Along with tax benefits on home loan when treated as self-occupied, it attracts nil tax-ability. On the other hand, when it is not maintained as your residence, you would need to consider the rental income from the property to calculate its tax-ability. Thus, before you plan to purchase a second home, along with exploring options for its interiors, and designing, also look into all the taxable aspects.
- Diversified investment – It is always advised from all the financial experts that you must not invest all your savings in one specific genre it should be divided into various assets such as shares, mutual funds, gold and most importantly in real estate as buying a second home is the most tried and tested way to multiply you wealth in few years and acts as solid asset for you and your family
- A tangible asset – a home is a tangible asset unlike virtual investments that you can access only from your computers/phones. A home is there for you when you need it, owning something in physical form gives a different kind of satisfaction and helps you bring wealth in coming years.
- A vacation home – If you live in the hustle and bustle of a metro city owning a vacation home is advisable as you can move out of the city whenever you get free time especially after covid pandemic owning a vacation home is an added advantage to work from home while spending some quality time with your loved ones.
To sum up, investing in a second home is absolutely fine and a great decision if you are wanting to diversify your investment portfolio or looking for a second home for any other reasons.
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