Pros and cons Of Investing in a Second Home

 

Buying a home is the best investment that an individual can make, and buying a second home is undoubtedly the next. 

Whether you invest in a luxurious 3 BHK apartment or a small villa, having a second home as an investment property in Jaipur will surely offer income profits and financial security.

Firstly, because Jaipur’s next address of investment and secondly, the property prices in the city are lesser as compared to other metro cities.

Additionally, many people are considering investing in the property because of all the benefits it comes with.

Along with investments in a primary property, many investors are considering investing in a second home as well. Owing to the multiple benefits of buying a second home, the investors see the potential for growth in the same.

The trend of having a second home as an investment property is growing in major metro cities like Jaipur, Delhi, Mumbai, Pune, and Bangalore. Apart from being considered as the best way for your money to grow by financial experts, the pros of owning a second home include asset increment and add value through an additional source of income.

But every coin has a flip, and so does the investment!

While a common thought behind investing in a second home is always positive, there are also a few pitfalls that one needs to consider before buying a second home. 

Let's know about the pros and cons of owning a second home simultaneously,

Pros of buying a second home

Positive aspects of second homeownership are many. Apart from emotional and financial security, there are a few highlighted below.

Offers Property appreciation and ROI 

Real estate property offers property appreciation over time and yields Multifold profits. Thus, if you are looking forward to earning some significant returns from real estate in the future, it is wise to invest and acquire second homeownership benefits.

Especially in a city like Jaipur, which is growing and bustling with work opportunities and young professionals, investing in a 2 BHK or a 3 BHK apartment now will offer significant capital gains shortly.

 

Has Various tax benefits

Many people like to use their second homes as their leisure homes to spend their vacations. However, if you charge rent for occupancy for no more than two weeks per year, the interest on the mortgage and the property taxes are fully deductible from your gross income.

Moreover, you can even earn some tax benefits under section 24 and section 80C and, if you own a property jointly, you can even get some joint property tax benefits.

 

Gives a source of Rental income

Buy a second home in a good location that also attracts tenants. You may use your property to generate extra income. You can use this second income to pay off your mortgage or earn more if you can rent continuously. Furthermore, your investment home's rental income can also cover the costs of the depreciation on the actual house throughout your ownership.

Cons of buying a second home

Now that we are aware of the perks of buying a second home, let's take a look at the other side of the coin. 

 

Gives a Sudden financial burden

If you are a first time home buyer, buying a new home can be an exciting and equally draining process. Moreover, the down payments and the initial registration costs, when combined, tend to take up a large chunk of your savings. 

In this case, one downfall that comes with the benefits of owning a second home typically incurs the costs of furnishing. If you are thinking of putting it up for rent, you will have to include basic furniture, paints, fixtures, and fittings.

 

Has Uncertainty and inflexibility 

If you aren't giving up your home for rent, you pay a significant amount of money each month for a second home. Thus, to justify your investment, you may feel a constant need to visit the property. Consequently, you spend time and money on travelling in the future as much as you enjoy staying at the location today.

Keep in mind that houses are not liquid investments – if you need to sell a property, it may take several months to get the price you want.

 

Requires timely maintenance 

Maintenance of the property is one of the major drawbacks of buying a second home. As the homeowner, you are solely responsible for all the home maintenance. If there is a leakage or breakage, it becomes your responsibility to repair it.

If anything goes down or the property has issues, you are the one to solve it and make sure that the property does not lose its charm.

Hence, if you want to buy a second property in Jaipur that is an investment property and wish to make sure that you find perfect tenants for it, head over to Mahima Group. They have an advisory team and turnkey rental services to offer you all the advantages of owning a second home.

Now that you are aware of the pros and cons of owning a second home. It's your turn to decide what suits you best.