Indian Real Estate industry as a whole has grown multiples. If we look at the stats, it has grown at the rate of at least 10-15 percent every year in the second half of the previous century. Apart from the property market, such an exponential growth is possible only in equities and share, which is relatively riskier, considering the drastic fluctuation in the national and international share markets. In such a scenario, an investment in the real estate market in a second home is certainly a profitable move.
Real Estate has always been a safe and risk-free investment option. If you have saved enough money, invest in a second home and get handsome returns in the future. Always prefer choosing a ready to move flats, so that your investment is safe and you can also expect quick rental returns if you want to rent it out.
If you’ve been thinking about buying a second home, there are some vital things to do before you start shopping.
- Find a real-estate agent who is familiar with your desired location. This person could provide you information about neighborhoods, market prices and the pros and cons of particular properties.
- Factor in additional costs. You should consider that you will be away from the property a lot of the time, which usually entails additional costs, such as having a management company check the place in your absence for water leaks, frozen pipes and other problems.
- Be sure you can afford two mortgages. You have to qualify for a second-home mortgage, which is on top of any mortgage debt on your primary home.
- Typically, you will need to make a down payment of at least 10 percent, meet credit standards and debt-to-income requirements, and provide documents for income and asset verification.
- Consider the tax implications of your purchase. If you use your home as a true second home, you could get a deduction for mortgage interest and property taxes, just as you do with your first-home mortgage.
- If you rent out your second home, you will have to consider additional tax ramifications, particularly if the rental period extends beyond 15 days a year.