Benefits Of Investing In A Second Home
Buying a home is a dream everyone harbours. With spiralling land values, rentals and expenditure- it is imperative to buy a home more as a necessity than as an aspiration. However, if your finances permit- you can opt to invest in more than one home. It is a great investment idea and more than just that. Here are some of the advantages of investing in a second home.
• Extra income through rent:
This is the most obvious reasons to buy a second home. Investing your money in a second home will ensure that you have an additional source of income in the form of rent. Your savings just don’t sit in a bank fetching mere interests but are actively enhancing your income on a monthly basis.
• Investment for the future:
Investing in a second home is a means to collect your savings at one place. These savings will come in handy in the future where you may need a bulk amount. A lot of people prefer to buy an additional home that they can possibly dispose off when they need a large amount of money during their children’s education, marriage etc.
• Appreciation of the money invested:
While depositing money in a bank will only bring in slight appreciation in the amount saved- investing in land can enhance your money manifold. One must study the growth of different areas in the city they want to invest in, and understand the growth tangent of the same. This will help them invest in a second home that will enhance in value over a period of time.
• Tax benefits:
If an individual is using his saving partly and relying on loans for the residual amount for the purchase of his second home- he can avail tax benefits for the same. The interest paid for this loan can further facilitate deduction in taxes.
• A long-term goal that will help one focus:
Often, if we have excess money left over after our expenses are taken care of- we may tend to indulge and waste it. But focussing on buying an additional property will help one save and prevent unnecessary spending.
• An additional home when you need one:
The needs of every family constantly change with time. There may arise a need for a part of your family to move out. Your parents may want a quiet place to spend their retirement days- it is at instances like this that your second home can always come handy.
• Additional asset for the future:
More often than not, one must think of assets that will help them in the future. Dividing property amongst children is a real issue that must be dealt with from a very early stage. Buying an additional home will ensure that you are leaving substantial assets for your children to rely on.
• The typology and location:
The typology of the house and the location determine the multiple uses for your second home. You could opt for a villa in the quiet and elegant suburbs of the city, or an apartment in an upscale apartment complex- different locations and typology will provide you with an opportunity to plan a weekend home, a vacation retreat or just a high end loft that will enhance your social standing where you can enjoy the varied amenities and a niche lifestyle that the home may have to offer.
• Easy to relocate:
If you are living in a city different from your hometown, investing in a second home in your city can be a great convenience. If and when the need arises, you can relocate to your home without any hassle as you have a home waiting for you. It is also convenient to come back home for a vacation and have a place to stay at without having to rent a place or depend or someone else.
• Investing in developing areas:
Studying the market and investing in developing areas can be a boon to you in multiple ways. As already mentioned, it will enhance your investment manifold to invest in a second home in a developing location. Apart from this, you can also enjoy the calm and serene life that these locations tend to offer. Most often, the government also plans newer localities with a lot more care, providing many facilities like large roads, parks etc. You can have access to all this, if you choose to at any given point of time without having to spend much at a later stage.
To further explain this point, let’s take a case scenario into consideration. In Kochi, today Kakkanad is one of the most preferred investment destinations. Over the past few years, Kakkanad has witnessed development of an array of residential and commercial projects. The boom in the IT sector, mainly due to the presence of Infopark and SmartCity, directly resulted in the need for residential projects to be developed in and around the area to accommodate the ever-expanding workforce. This has resulted in most of the space in Kakkanad being occupied or owned for large-scale residential projects. Due to this, the availability of land for further development is getting lesser and lesser, and the rates are continually increasing. Now, with the amendment made to the Wetland & Paddyland Act of 2008, land claimed before the inception of the act can only be regularised if 50% of the current fair value of the land is paid to the state government. This would directly translate to higher rates being imposed by builders to the end consumer.
T.A Joseph, MD & Founding Director of Confident Group believes that the time is still right for those looking to invest in a dream home in Kakkanad as the development of the location is only in the beginning stages. In relation to the Kakkanad IT hub more economic growth and growth in infrastructure is foreseen. With the blueprint to introduce metro rail service, water metro and a bus hub on the table, the locale is all set to be a hotspot for investment. Mr Joseph strongly feels that regions in close proximity to Kakkanad are the best option for prospective home buyers or investors to look at. Places like Kakkanad east and south-east have a lot of scope of development as 4-5kms around the IT sector are set to see a significant boom in infrastructure projects. Keeping this in mind, Confident Group has projects ranging between 34 L - 1.25 Cr. in the immediate vicinity of the Infopark and SmartCity. You can choose from a range of apartments and villas that are located conveniently in the heart of Kakkanad. The point to note here is there is still scope for great investment opportunities in Kakkanad. The right project, the right builder and an overview of the market conditions and forecasts will get you excellent returns within just a few years.
• Adapting to the changing cityscape:
If you have an additional home in a contrasting environment, it will help you in the longer run. If you are tired of the hustle and bustle of the city, and have a second home in a quieter place- you can always move there. It can also become your retirement home. If you buy a property in the heart of the city, and live away from the city- your second home can be a great asset as with passing time it becomes more challenging to own a piece of land in the centre of the city. Living in the centre definitely has its perks- and can be enjoyed by you or your family when the need arises.
• Short term investment:
Buying a second home can be a great short-term investment. Often, residential apartments are available at a low pre-launch rate. With passing time, the value of land appreciates and the cost of construction also raises every day, making the purchase at pre-launch highly beneficial for the investor. The soaring prices of the land, construction material, labor, changing marketing trends etc will not affect the end consumer if they opt for pre-launch projects. This makes the purchase a good investment, and by the time it is ready for occupation the value of the property increases more than 50%. Even if the investor chooses to sell his second home at this point- he still would incur a lot of profit. If you are opting for a bank loan and calculating interest- your investment return will still be 40-50%. One pays pre EMI at different stages of construction making it less burdensome and beneficial for the investor & also obtains benefit for IT return.
These are some of the many perks of buying a second home. Buying a second home is a good investment in India, and one must consider it as an alternate means to save and invest their savings both for long-term and short-term benefits.
If you are looking to invest in a second home, then do consider our exclusive range of apartment and villa projects in Kerala :