Top 5 Advantages of Buying a Second Home

Everyone at a certain point in their life dreams about buying a second home. Considering the ever-rising value on properties, the expenditures that one has to take if staying in a rented apartment and other factors, buying a home is more of a necessity than an aspiration or both (to some). But, this aforementioned scenario is for those who are first-time home buyers. So, what might be the reason behind people or investors buying a second home or even a third.

Purely financial, buying a second home is a popular and well-tested financial decision as real estate is one of the highest money-yielding investment options. Alongside this, buying a second home is an added asset to all your properties or wealth and in some cases an added source of income. Through this blog, you will further understand the benefits of buying a second home.

Top Benefits of Buying a Second Home

1. A Parallel or Extra Income Through Rent

A very obvious reason why people buy a second home is to earn extra income. With India being open to many global companies and jobs, the citizens are moving from their hometown to other cities and towns in search of jobs and better living conditions. The first milestone they achieve upon moving to a city is renting a place, and this is when having a second home brings you income. Renting your place to tenants will allow you to earn extra. Many people also use this extra earned money to pay off their bank loans (which they might have taken to buy the second home).

2. Enhancing Your Wealth

If money is one of the attributes of increased wealth then a second home is a guaranteed wealth enhancer. Saving money is something that is taught right from a young age so that they ensure that these young people have a good amount saved for their retirement. To achieve the same, many deposit a fixed amount of money in the banks and get multiplied by the bank’s interest, and get added to it.

This is one way of saving money but, investing money in a bank often results in limited appreciation of money. However, investing in property never goes out of style. To yield a higher amount of money one can study the growth of property rate at different cities and towns, understand its growth tangent and invest accordingly.

3. Tax Benefits

Explaining how one can save on tax while having a second home is a risky business and many have different ways to do it. However, imagine an individual uses his savings partly and relies more on a loan for the residual amount for the purchase of his second home, he or she can avail tax benefits for the same. The interest paid for this loan can be further facilitated towards deduction of taxes. Additionally, if the individual rents the second home, he can use that rent to pay off his loans. The idea here is to smartly invest less amount and spend even lesser but, to earn more.

4. Take Advantage of the Typology and Location of Your Home

This applies to those who have two homes in the same city, own, or even state. Imagine the situation where you are living at your already-owned home (which is on the outskirts) but, due to the job requirements or any other reason you have to move to the city wherein you already have a home. Wouldn’t you move to your second home without worrying about finding a place for you and your family? Clearly, it is a win-win situation and you have saved a lot of money that is usually involved with moving around. Also, if your home is at one most continuously flourishing parts of the city the benefits get added ten-fold. The point to be noted here is that while buying a second home it is better to analyze the real estate market and trend of your desired location and then invest.

5. For a Secure Future

It is very obvious that everything that humans do is for their future. One act that they do today is in the hope that it benefits them tomorrow or in near future and that is exactly why they get educated, get employed, save money or invest. Buying a second home secures that future for you. We have already explained how a second home can help you save and earn money. But the use of a second home goes beyond that.

• It is literally your second home. Imagine this scenario, where an individual (middle-aged man with one child) despite having one home bought another. Now upon retirement, he plans to move out of his home (which he gave to his offspring) and chooses to stay at his second home and spend his retirement in peace. This is a very plausible and very practical thought that allows both parents and the child to have a home and also enjoy their life. Similarly, your second home can also be your family vacation home (if it is bought in any picturesque location). So, the chances of the need of having a second home are very high.
• Setting a long-term and personal goal. Buying a home requires a lot of planning, calculations, and financial adjustments, and now, think of buying a second one. The thought of buying a second home will help one to plan ahead, set a goal for themselves and also for family, allow them to save more money than what they usually do. Once they do it regularly it will become a practice.

Conclusion

Buying a second home generally seems like an added asset but, it is more than that.  Let’s all be honest here and agree that savings are important and the wisest, safest, and high-return guaranteed method of saving and earning more is by buying a second home. The location, the type of home (1 bhks, 2 bhks, or 3 bhks), and other societal infrastructures are the other contributing factors that add value to your property.

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