Looking to buy a second home as an investment? Here are some valuable tips
The Pandemic has revealed the necessity of investments for future and according to a recent survey conducted by Housing.com and industry body NAREDCO, out of the 3000 participants over 35% voted for real estate as the most trusted and safest investment. Yes, time and again Real estate investments have proved to be the most reliable and dependable ones so the idea of investing in a second home is a prudent and safe one. Apart from definite tax benefits investment in a second house also yields regular rental returns and generates higher ROI.
So, while you consider investing in a second house, here are the points to remember. Each of these though distinct are mutually dependent and together play a crucial part in your decision -
Evaluate Your Financial Stability -
Before you invest in your second home, you need to assess your financial stability. Allocate funds for downpayment and also evaluate the feasibility of the EMI, especially if you already have an EMI on your first home. When it comes to the price of the property, under-construction properties are much pocket friendly when compared to Ready-to-Occupy homes. These also offer pre-EMI benefits and when located in developing location they offer draw good rental income which can be used to pay the EMI.
Properties under construction along the OMR like the apartments for sale in Kelambakkam, flats in Siruseri and Padur fall in this category. Since they are located along the IT Corridor these properties are in demand amongst the IT professionals employed here. Apartments in Kelambakkam and flats for sale in Padur are equipped with modern amenities, earn very good rental income and also appreciate well in a short period of time.
Evaluate your long-term goals
Analyse your long-term goal in this investment. Is the second house your vacation home or your investment to increase your portfolio? If investment is the primary motive the choice of the locality should be accordingly. A residential locality that is well-connected to business hubs would yield regular rental income and also appreciate considerably in a short span of time. Flats in Thirumazhisai are ideal in this aspect due to the proximity to the prime location Porur and also good ideal living conditions that prevail in Thirumazhisai. Owing to the accessibility to Oragadam, and the industrial corridor Sriperambudur the apartments in Thirumazhisai yield regular rental returns and excellent ROI.
If a vacation home or retirement home is the desire analyse the accessibility to health facilities, entertainment centers and other necessary amenities. Apartments for sale in Kelambakkam and other localities in the IT-corridor provide a calm,serene and green environment and also have access to an ideal social infrastructure consisting of hospitals and entertainment hubs. Finally, your long time goals would decide the choice of second home.
The return on investment
When buying a second home, one of the most important factors you need to consider is the potential return on investment from the home. There are many factors that come into play such as the location of the home, the demand for rental properties in that area and its connectivity to the neighbouring places. Evaluating in this regards the flats for Sale near Porur would rank high as the optimal choice, the proximity to the ORR, the bangalore highway, the upcoming kuthambakkam bus stand are the crucial factors. This locality is developing at an astonishing rate and the rate of properties here are constantly increasing. Due to the easy accessibility of the IT hubs in Porur and the industrial corridor of Sriperambudur and Oragadam the flats for sale in Thirumazhisai would earn good rental income.
Source of Funds
Arranging the finances for your home is one of the most crucial factors when it comes to buying your second house. According to the important amendment of FY 2019-20 taxpayers are allowed to declare two houses as self-occupied and can claim tax benefits on a second Home Loan, in addition to their first Home Loan. Under section 24(b) one can claim Tax Benefits of upto 2 lakh on the interest repayment on self-occupied property and under 1.b of 24(b) one can claim complete deduction on the interest paid on let out property. While under 80C a deduction of upto Rs. 1.5 lacs on the Principal loan amount, including registration fees and stamp duty can be claimed.
Both as a source of regular income and an appreciating asset your second Home is a good step towards financial stability. Consider the above factors and make the right choice towards this financial prudence.