Top Advantages and Disadvantages of Buying a Second Home


Date: 16-November,2020Last Updated: 27-February,2021

The pros and cons of buying a second home

Buying your own home is a dream shared by many people. However, there are only a few lucky ones who are privileged enough to buy a second home!

Buying a second home is an all the go financial decision since real estate is one of the best investment options out there. We will help you to make an informed decision by pointing out the pros and cons of buying a second home.

real estate investment

Pros of Buying a Second Home

  • Extra income: The most obvious benefits of buying a second home is earning extra money by renting it out to tenants. You can use the rent money to pay the monthly EMIs of a Home Loan. In this way, you don't have to worry about saving a part of your salary to pay the EMIs. Also, if your second home is in an area that attracts renters, you may be able to use your house to generate extra income as you won't be spending all of your time there.

  • Better Investment: Buying second homes are considered as a good real estate investment option for future events like retirement, children's education, children's marriage etc. Since rising inflation is contradicting with appreciation in the property's net evaluation, it is considered to be a safe investment for future events and emergencies. It can also be a good investment if you buy a property in a neighbourhood with rising home values. Putting your money in fixed deposits, bonds, mutual funds, or gold could be a great idea. But, if you are planning a bigger real estate investment, buying a second home will be the better choice. Market trends show by investing in real estate would help you to earn better returns than any other asset class.

  • Location for Gatherings: It can be the best location for your family gatherings. The annual visit can become a tradition that will keep your ever-growing family close as you spread across the region and country.

  • Working far from home: It is one of the most common reasons to buy a second home if you work far from home and you want to avoid living in a hotel during weekdays. If your home and your work are far apart, then it might be impossible to come and go each day. This may also be possible that during the workweek, you need to live where you work. Living in a hotel might seem like a good option to start with, but at last, you need a home only, and you might want to start looking for a second home in the city. It can be a place that you can truly call your home during the workweek. In this situation, you can either chose to rent a house, or you can buy a house. Buying a home can be a good option if you are going to work in the city for a very long time.

  • Easy Switch: If you have properties in two different cities, you can think of shifting from one city to another any time you want because sometimes all you need a change of place.

indian real estate

Cons of Buying a Second Home

  • Difficult to sell or rent out: If your budget gets tight, you can always sell your second home or rent it out. But if you have a tough financial stretch, there is a good chance this will occur during a recession, when many other second-home owners also attempt to sell or rent out their second home. Hence, the property market typically becomes flooded at times, and it becomes difficult to sell or rent out the property.

  • Your successor might not be interested in inheriting your second home: You might consider your second home you buy to be a legacy you will leave for your family. But your heirs will not be interested in that property. They might get more interested in stocks and bonds investment rather than investment in any vacation home. If they inherit real estate, they will be required to pay the property's expenses to keep it in the family. Also, in the case when there are multiple heirs, inheriting a vacation property can lead to arguments about its shared use and costs.

  • Benefits from tax savings reduce over time: In case, you bought your second house on EMI. So, during the initial EMI payments of a Home Loan, there is a considerable amount of interest to be paid. But, in the later stages of loan repayment, the interest amount declines, and this affects the tax deduction for interest paid towards Home Loan. As the interest reduces over a period of time, tax benefits that you were getting will also reduce.

  • Difficult to maintain: Maintaining your second home will be a difficult task if purchased far away from the city you live in. Also, if you do not have a proper security system there, independent houses can be more dangerous than apartments. In some cases, you may spend your entire visit working on the property, which is surely not what you expected when you dreamed of ownership.

  • Work and risks in managing rentals: There will be the work required to manage the property and deal with tenants' requests. You might hire someone as a property manager if required, but it can cut into the money you will make from the property. Also, in many cases, you have to deal with the risk if the tenants may not treat the property properly and could damage that will cost you a major amount to repair it and purchasing landlord insurance can help remediate this risk.

So, folks, that's most of the pros and cons of buying a second home!

Did we help ?

Post Response

Categories

                           

Latest Blogs

Why Read Real Estate Blogs?

Well, we are aware that real estate has never exactly been one of those binge-worthy blog categories. It has neither been the kind of topic you could not get enough of, nor is it half as juicy as celebrity gossip.

However, in India, real estate blogs are starting to get clicks and likes, and it has become one of the trending topics. People worldwide are beginning to realize how real estate as an industry affects the economy and how important it is to understand housing trends to enhance their lifestyle.!

The relevance of informative Indian blogs on real estate and finance are at an all-time high now. The youngsters are bidding big on investment options, and brackets such as realty have proved to be highly dependable compared to others.

The Millennials are flooding in to invest in apartments, plots, and villas, and the earliest members of the Gen-Zs' entering the workforce and looking forward to having their own homes. This has only fuelled the growth of digital real estate blogs to keep up with the tech-savvy generations.

Also, the real estate sector has been proving time and again, how reliable an investment choice it is. So, learning about the sector is the smart way to climb up the ranks, and where else can you learn so much except from real estate Blogs! Real estate is the second-largest contributor to the country's GDP; hence there is no doubt that it affects every one of us, whether we see a future in the Real Estate Industry or not. After all, we all live in our homes, and housing is a significant part of the industry.

What sets India's favorite Homes247.in Blog Posts apart?

We know exactly what you need to know and what you like. We know you want to feel engaged and entertained, and at the same time, hot housing news should be fed to you! We have turned the tables, grab a spoon, and start digging!

And Voilà! We present to you the most Interesting and Informative blogs!

As our name implies, we are not limited to realty alone, granted we do Specialize in it. We are all about Homes, and we are in love with Tech and Innovation! Naturally, our blogs cover a myriad of topics related to real estate and housing from Luxury, Lifestyle, Home Decor, Vastu, Real Estate News, Reviews, Tech & much more!

We make every one of our real estate blogs as interesting as it can get and attach with absolutely unique and accurate images, to provide you a better understanding. Not only do we cover a wide range of topics, but we also cover them at the right time. We update you on our socials such as Facebook, Instagram, Linkedin, Pinterest, and Twitter on every trending topic, so you are never miss anything and worry about being left behind!

However, we never go out of hand with our Indian real estate blogs that our beloved Readers have come to love over the years.

What is the Importance of Real Estate Blogs?

Everything in India is a state of constant flux; maybe that's why we Indians became one of the most adaptable and cosmopolitan people in the world!

If the nation's elements are shifting its focus, how can real estate be any different? Indian Real Estate Sector is perhaps one of the most dynamic ones in the entire world. Since the Real Estate in India is yet to be organized entirely, the variations in one segment affect another in ways difficult to comprehend.

The complexity and nuances can be understood only by reading about what is going on in the sector. Like we mentioned above, it affects every one of us. Hence it is essential to keep up to date.

With its ever-changing shifts and tides, it's virtually impossible to keep track of the sector's latest trends and sink our anchor deep. That's where we come in! We are just one google search away!

We also try to solve every home-related query through our Indian real estate blogs. And that's not all. We provide you insights on technologies that make the modern taste and rate of development possible, detailed analysis on real estate projects, insights on loans and taxes, advice on the home buying process, and articles on health and fitness. We provide you information about the trending topics in the Indian real estate industry.

We also host video podcasts named Expert's Voices, where we discuss with the leading players in the industry about market scenarios, offers, anything and everything related to real estate.

In addition, we host Real Estate News so you can stay updated on the sporadic events that happen around the country concerning Indian Real Estate. We also make short and easy to understand real estate video blogs.

We have got so many topics to read about that even if you have years of experience or are just curious and googling to get some ideas about Indian real estate blogs, you will find the best ones here.

At Homes247.in, we strive to provide you only the best real estate blogs. Our blogs are always entertaining; even the dullest subject we touch upon, we try to make it engaging. We make sure the best of the best is are the only standard we keep ourselves at when it comes to our service or our Indian real estate blogs.

Our team is made of a dynamic group of keen hands-on expert researchers who work tirelessly along with passionate and knowledgeable content writers to bring to your fingertips the world of real estate.

On every one of our real estate blogs, we research vigorously, write creatively, carefully compile, and thoughtfully curate the best real estate blogs, especially for you, from India's best content writers and contributors.