Buying a second house is an excellent investment choice if you already own a property and have some money left over. Investing in the 2nd home project near Mumbai may not be as tough as purchasing your first. It also has a lot of advantages as an investment choice or a source of consistent income via monthly rent.
However, before you move forward with the idea, keep the following in mind:
- You don’t owe any overhead debts: You should make sure you don’t have any previous debts because purchasing a new home needs a huge investment and you may need to take out a home loan. As a result, any current loan may simply increase the loan’s overheads.
- You have adequate emergency and reserve finances: Before you intend to buy a second property, be sure you have enough emergency and reserve cash.
- Earn rental money: As real estate values have risen; rental revenue has also risen dramatically over time. This makes renting out second home a viable alternative for a steady income stream.
- Tax deductions on interest paid under Section 24: If you took out a loan to acquire your second home, you could deduct up to Rs. 2 lakhs in interest paid (if the house is not rented out) and up to the amount paid in interest if the house is rented out.
- Purchasing a second home when you have the finances is always a smart idea to enhance your assets and generate new alternatives for additional income.
Let’s take a look at some of the advantages of owning a second house while you have the opportunity to do so.
Passive Income Source
Renting or leasing out your second property might provide you with a steady stream of money. The apparent benefit of producing additional income from your second house may be used to pay monthly home loan EMIs (if the home was purchased with a home loan) and part payments on other loans or investments.
Make a Retirement Investment
A 2nd home investment in India may be a wonderful investment choice for long-term goals like retirement or accomplishing comparable milestones in the future and providing an additional source of income. Because real estate investments are thought to provide strong inflation-adjusted returns over a longer length of time, purchasing a second house might be a profitable and worthwhile retirement alternative.
A Holiday Destination
Your second home can become a holiday destination for you and your family and the best place to have a blast at. The second home can help you enjoy your vacations when you are tired of living a monotonous life and are planning a break from your hectic daily schedule.
Having a second home increases your net worth. Because the value of the real estate in India is rising at a rapid rate, the house’s worth will increase as well. Over a period of time, this would result in a high-value asset. This might be sold at a greater price in the future to liquidate the asset, while the rental income adds to the benefits.