At the mere mention of the words ”second home”, many people’s minds go to that lake house they would have built for summer retreats, but that is not always the case. A Second Home can also serve as the primary source of residence and comes with a plethora of benefits. With the real estate market developing past few years, many more homeowners are starting to view their second homes as a means of increasing their equity as well as their financial security. For instance, if you have one home which you currently reside in as well as another home in hand, you will be able to earn a decent income by renting out this other home.
1. Your Financial Security Grows
One of the first benefits of having a second home is gone the first time around and that is the increase in your financial security. It will be useful in decreasing your total liabilities, increasing your cash-based assets and allowing you to avoid incurring further liabilities which could prove to be very important at times of financial troubles. Renting the house would be easily done through AVAILS to manage short term leasing or long term to within a few months so that there would be a steady income coming in.
2. Eliminate Debt
When you own a second property, you are in a position to lessen your debt. You can earn some monthly income if you decide to rent out the second home, and that can help you pay off existing debts and also ensure you do not accumulate new ones. This financial approach is beneficial, especially for people who wish to be financially stable.
3. Increase Your Real Estate Investment Properties
If owned, the second home can be a bludgeoning weapon commensurating with the targeted investment portfolio geographic area. A property which is sleeping and not rented can be rented out during off-season receiving a monthly rent thus allowing for better investment of funds. This strategy can be helpful for those wanting to improve their real estate portfolio and work towards financial independence.
4. Effectively Save for Retirement
Real estate has the potential to boost your net worth and value in the long term. For example, a second home can serve as a source of rental income, critical for retirement savings. This tactic tends to benefit from high relative interest rates which make laying the groundwork for a comfortable retired life painless. After putting in all those years of toil, you can finally retire at a beautiful place which is more than relaxing. From a serene little cottage in your hometown to the location of your dreams, a second home can bring you closer to your roots and help you unwind.
5. Deductions And Claims
Within the parameters in Deductions and Claims people who are paying a mortgage on a second home in a city or residing somewhere outside the country will be eligible to claim certain tax benefits in India. The principal amount is tax exempted under Section 80C and home loan interest is tax exempted under Section 24B. Under lifestyle expenses the section for one time principal repayment does provides tax deduction, such as ₹1.5 lakh under Section 80C and ₹2 lakh under Section 24B of the Income Tax Regulations.
6. Spend Time in a Holiday Home
If you have a second house, then you do not have to worry about soaring vacation rental expenses. You can have a vacation home where you can choose the time period and the guests that you want to have round, this allows you to have your family and friends with you. This system helps you in having friends and family when you are away and having fun.
7. Investment Is Safe And Risk Free
Constructing investments does bring about good returns on investment especially if located in a good location. It is safe to assume that purchasing a second house is relatively safe because property values are always increasing thus the effects of inflation are lessened. Plus, if the need arises, you have the option of liquidating the second home in case of an emergency where there’s a cash flow crunch.
Conclusion
There are many benefits associated with getting a second home like financial stability, lower debt levels, more real estate assets, even more so in recession years. These are the benefits that makes the prospect of owning a second home attractive but with them come the risks as well. It is imperative that you properly assess the security in place based on income dynamics and debt positioning prior to purchasing one. If you are looking for a second home investment in Kerala, your search ends here.
Author – Dream Location
We at Dream Location focus on smoothening the home buying purchase process for potential home buyers, starting by addressing all their purchasing concerns as the trusted real estate brand within the nation. Articles that describe many details across several fields in the real estate industry are provided.
For more information about Dream Location and to search your dream property, please visit Dream Location on Google Map. Contact us today to know more about the best real estate deals in Delhi and North India; we will connect you to the right property investment.