Dos and Donts while investing in a second home

The idea of a vacation has changed over the past few decades. A cosy hotel, a room service kitchen, a gaudy lobby and vivid options to relax and enjoy. This was the predominant concept of an ideal vacation for many. For some, this seemed like a dream come true. In the last few decades, especially in since the overturn of the millennium, going for a vacation or a trip with the family has transformed as a concept. This transformation the expectation setting of people changed to a considerable extent.

With this welcome change started the trend of having your own space to spend quality time with family and friends, and take short but fulfilling trips to this abode, fondly called the “second home”. Buying a second home in today’s ever-growing market can be indeed a rewarding experience.

Broadly, a second home is bought for three primary reasons:

a. To enjoy additional rental income.

b. A futuristic investment looking for appreciation over a long period of time.

c. Or simply for leisure and self-use.

We understand that though many people would like to have a second home for either of these purposes, buying one is not a simple decision to come to. To help you decide on your second home and satisfy your purpose of doing so, here is our foolproof Dos and Dont's list. Check this list before you invest your hard earned money in a second home. Once you’ve checked all the boxes, your perfect second home is just around the corner.

1. Where my second home should be?

The location of the second home is crucial, when it comes to making a decision. Prices and further appreciation are dependent on the location of the second home. Here’s what the experts in land acquisition and development have to say:

a. It is always preferred that the location of the property should be in the radius of 280 kms from your home town. The ideal travel time by your own car should take less than six to seven hours.

b. The location should be at least close to any of the major city or a Taluka place. It is preferred that emergency services like Hospitals, Police, etc are in a close proximity.

c. It should be well accessible by Tar road and Public transport too.

d. Rental demand for tourists in the surroundings should be researched well in advance if the main purpose is to rent it out.

2. What is my type of second home?

Remember that a second home’s primary purpose is to spend some quality time with friends and family and to take a break from the routine, in a place of your liking and your choice. When it comes to going on a vacation, what kind of place do you normally go out to? A beach, a valley or a city? Define your preferences clearly. The land experts say:

a. Second homes may have options such as dam view, sea view, hill stations, etc. Make sure your choice is best suited for you and your family.

b. Based on your health and body structure, select the best possible alternative for you.

Eg :– Someone may find a humid climate near the sea favorable for him/her but not the cold and chilling conditions of the hill station.

c. Again for some, a single sit out home in a remote area would be ideal but some people may like to stay in an organized row bungalow or a scheme developed by a Promoter. So decide well in advance if you are going for a N.A. Property, a Farm land or an Agricultural plot.

3. How do I decide my budget?

A second home is always a secondary priority. Make sure that your basic requirements are sorted before you think of investing in a farm land or N.A. Property. Consult a land expert before you buy. Here what land experts have to say:

a. You should very calmly & carefully calculate and rather discuss with your spouse when it comes to investing in a second home.

b. Remember, your second home is your prestige and pride. So make sure that you have backed up your first home’s EMI, your child’s future and your other necessary liabilities before investing in a weekend home.

c. Rental income should not be the ONLY ONE factor for you to go for a second home.

d. Always see to it that your second home adds up to your tax benefits. Set off your rental income against your interest paid on home loans and loss from house property. Ask a tax consultant beforehand.

Now that you know the basics of investing in a second home, your much awaited dream is not far away! But wait, here are a few important tips for your second home investment.

a. Do a legal paper check from your advocate before you invest.

b. Check the basic documents such as 7/12 extracts, mutation entries, search report for the last 35 years, title report, previous owner’s sale deed, etc.

c. Do a basic research on the upcoming new Government’s scheme, tourist spots, infrastructure growth in the vicinity and overall development of the local municipal corporation.

d. Introspect about how you can maintain your home in terms of maintenance, minor repairs, garden maintenance, cleaning, etc.

e. Install a CCTV with a live monitoring in your second home. This will ensure the safety of your house when you are away.

f. Typically assign a vendor on an annual contract for the maintenance of your property. This will give a major relief to you when you actually travel to your second home.

g. Keep the phone numbers of the local people handy with you. Eg- Neighbors, Doctors, Electrician, Grocery Stores, etc.

h. If you don’t have your own advocate, then hire a local advocate as he would be more familiar with the local authorities.

Still confused? Or have some doubts? Get in touch with a land expert today!