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What are the Advantages of Owning a Second Home?

What are the Advantages of Owning a Second Home?

Do you already own a home, but are left with cash to spare? If yes, then invest all that money in a second house!

Why Invest in a Second Home?

As an investment, a second property serves multiple purposes. You can use it as a luxury holiday/weekend home or for when you want to get away from the cacophonous urban life. And, when not in use, you can lease out the said property to earn extra income. Moreover, as an asset, a second home has great capital appreciation value that can be leveraged in the future for reinvesting in an even better property.

Additional Read – Important Things to Consider Before Buying Second Home

Advantages of a Second Home

Call it what you may – a rental home, retirement abode, holiday home, etc. – purchasing a second home comes with a host of benefits. They are-

Rental income

You can use the rental income coming in from the second house to pay off your home loan EMI or any other debt. Alternatively, this additional income can also help you finance newer investments. Remember that over the years, the rent received from your second property will increase as real estate prices rise, and this hike will offer even higher ROIs.

Holiday home

If you purchase a second home at a vacation spot with picturesque views and a desirable climate, it can double up as a holiday home for your family. So that when you’re short on travel funds, this holiday home can become your getaway resort.

Additional Reads – Top Things to Consider Before Buying a Farmhouse

Retirement abode

If your financial health allows it, you can also invest in a second home for retirement and in the meantime, rent out the property to earn some extra cash.

Safe investment

Property investments tend to generate higher ROIs than other assets, especially if the property in question has a great location. Since the appreciation of property value negates the rise in inflation, investing in a second home is a safer option. Moreover, in the future, if there’s a financial emergency, you can sell the second property to meet the necessary monetary obligations.

Additional Reads – Want to Own a Home? Find Out How

Tax benefit

There are guaranteed tax benefits on availing of a home loan in India to buy a second home. You get tax savings on the principal amount under Section 80C and tax deductions on the home loan interest rates paid to service the loan under Section 24B. Furthermore, borrowers can claim a tax deduction of Rs. 1.5 lakhs on the principal repayments of the home loan under Section 80C and a deduction of Rs. 2 lakhs under Section 24B of the ITA.

The Bottom Line

So, investing money in a second home is a profitable option as can be inferred from the benefits mentioned above.

Do you want to apply for a home loan to invest in a bigger and better property? If yes, then reach out to Tata Capital to secure the desired loan amount at competitive ROIs. We also recommend that you check your home loan eligibility criteria before applying by logging on to our website today!

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