Things You Must Know Before Making A Second Home Investment
Investing in a second home is a popular choice that many homebuyers make. Whether you’re looking at your second home as a holiday destination or as a source of rental income, the reason for investing in a second home can vary greatly.
Here are some things to keep in mind before making a second home investment:
- Reason for buying the second home:
One of the most important things to do before making a second home purchase is to be clear about the reason why you’re doing so. Keeping in mind your long term financial, investment and lifestyle goals can help you arrive upon a clear decision.
2. Location and type of home:
Depending on whether you’re buying the home for investment purposes (resale value), rental income or as a holiday destination, the location and type of home will play a key role in matching your reason for buying a second home. If you’re looking at ROI in terms of rental income and resale value, it makes sense to pick an apartment in a well-connected location in a city.
3. Calculate all the expenses:
A second home often entails a sum of various expenses, like home loan EMIs, interest on the loan, insurance and maintenance costs. Calculate all the expenses that will go towards this purchase to make sure that you can afford to invest in one at the given point in time.
4. Home loan offers and tax benefits:
There are various home loan offers that are tailored to the purchase of a second home. If you are purchasing this home for rental income purposes, you can use that income to pay off your loan EMIs. At the same time, you will want to explore the tax benefits that you can avail of against the interest that you pay on the home loan.
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