Things to Know Before Buying a Second Home
Buying your first home is special, but buying your second home is even more special. Investing in a second home means that you found your first home investment to be lucrative and are now fully ready for a second round of investment! It also means that you will now become a proud owner of two homes, ensuring lifelong financial security and a steady source of rental income.
Even though the pandemic has brought in a lot of changes in the country, the housing market remains steady. With developers having a large inventory and banks giving the lowest interest rates, this is the best time to take the plunge and invest in a second home. However, you do need to keep a number of factors in mind before investing in a second home and here is a look at some of them:
Long-term Goals
Don’t go in for impulse buying, but plan out your long-term financial goals in life before committing to buying a new home. Buying your second home on a whim might end up with your not being able to pay the EMIs! You also need to decide whether the second home is for your own use or for giving out as a rental.
Locality
Even if you don’t plan to use the second home for yourself, you need to ensure it’s located in a good neighborhood with easy access to important infrastructure. Facilities such as schools, hospitals, shopping centers, bus stops, career hubs, etc., should be within a short distance. Visit the locality during peak times and off-peak times to know if it’s prone to traffic congestions too.
Type of Home
You will need to decide whether your second home should be a villa home or an apartment. This decision should be based on whether you want the second home for your own use, or for a second income. While it’s easier to get renters for apartment homes, villas may take a little longer to attract tenants.
Hire an Agent
Sometimes, it’s best to go with a knowledgeable local real estate agent, than to trundle around a new locality by yourself. A local agent has better knowledge of the area and can advise you accordingly about the market.
Additional Expenses
Aside from the expense of buying the property and its monthly EMI repayments, you need to factor in other expenses such as stamp duty and registration, and maintenance and home insurance. With ongoing climate changes and its adherent floods and cyclones, home insurance and maintenance amount to a pretty penny too.
Home Loan
Banks offer loans with varying interest rates and processing fees. With home loan interest rates being at a record low, this is the right time to go for a home loan. Choose a repayment plan that best suits your pocket. However, do note that you need to pay off your previous loans and credit card bills to improve your CIBIL score before applying for a new loan. A CIBIL score of at least 750 points needs to be attained.
Secondary Income
You also have the additional option of using your second home as a source of extra income. Till you are ready to use the second home for your own purposes, you can give it out for rent and use the income generated to pay off monthly EMIs.
Tax Benefits
While you have to report income generated from rent collected, do note that you can claim back moneys spent on maintenance. Aside from this, you can also claim back tax on interest paid out on EMIs under Section 24 of the Income Tax Act – you can claim back up to 2 lakhs this way per financial year.
For those on the lookout for buying an apartment or villa in Thrissur, look no further than the premium residential projects by the prestigious Vishraam builders. With over 21 years of excellent experience, 45 projects and over 2000 satisfied customers, Vishraam builders offer both villas and apartments located in prime parts of the city and its surroundings to suit every kind of taste and need.
Vishraam builders believe in protecting Mother Nature and as such, every Vishraam home is built responsibly while conserving natural resources, minimizing waste generation and pollution control. Come visit a Vishraam home today!
