It is said that in the real estate, there is nothing that can be accredited as ‘too much’. It is the best investment and many affluent people of the world are so because they made the right property investment at the right time. Buying own house is always at the top of the mind of any person. When he starts his career, the second benchmark after buying a bike or car is buying an own roof. So, you are at the stage of life when you have your own house, a small family and fair bank balance. What’s next?
Buy a house. Yes, and we are not kidding. If your financials are good, you should be thinking of buying a second home. There are many compelling benefits of buying a second home, let us see what they are.
1. As a real estate investment
No doubt, equities and mutual funds are good investments but real estate is the best one. The real estate market is on the rise this time and as compared to any other method, it is going to get you the optimum return on the investment. It is considered that you need to hold on a property in Jaipur for at least three years to save on the taxes and get the right appreciation value of the house. So, when you are capable of taking this leap of faith, invest in buying a second home.
2. To avail the tax benefits
In case you buy a second home with a home loan, you get the tax benefits on it under section 80C on the interest payable. If you buy this second home in co-ownership with your partner, you both get the tax relaxations. The two co-owners, however, need to be paying for the loan from their individual separate funds. Also, the home loan is necessary to be in the equal proportion.
There is no relaxation on the principal paid, but you can claim the tax benefits on the whole interest paid.
3. To give out on rent
A majority of people buy a second house to put on rent. Renting is the easiest way to earn money without doing anything. Not only you get the rent from the second home, it can also be used for the tax deductions. However, when you have paid the home loan in full, you cannot avail any tax benefit on the rental income. Renting has become a major source of income of many families in the metro cities. Small or big, there is always a demand for the houses on rent. If you are buying a house in the city, the students or families are going to be the primary face of the tenants for you. If you are buying such home near the beach or tourist spot, you can use it as the vacation rent out.
4. Make it a getaway for vacation
Why rent the house to someone else when it can be your getaway? How many times we plan to go for a trip on the weekends? And how many times that plan came through? If you have a second home, you can spend the weekends in it for a change. You can relax and chill in this house with the family without spending much. Sometimes, it is not necessary to cross oceans to get happiness, just visiting your second home can work magic.
5. Plan for the future retirement
The second home can become your address when you finally retire after working for the majority of years of your life. Usually, people buy the second home at the outskirts of the city. This is for two main reasons; these houses can be bought at lesser prices as compared to the houses in the city and makes a perfect place to go and relax. In the old age, you can use this home as the retirement house. Away from the hustle of the city, relaxing and close to nature. You can also buy a home in your hometown to settle in the old age.
All these reasons are pretty convincing to buy a second home. Many people want to own a second home but you can be among a lucky few if you have a stable bank balance. Yes, if you are not renting it, the maintenance needs to be top-notch. Although, there are fair chances that your property is going to reap the appreciation over the period of time. The end choice is yours.