Yogesh was planning to have a luxurious home away from his home city, Pune, to relax and unwind but not too far. He searched for some cool township in Panvel as a second home. After buying his first home 20 years ago at a much lesser investment, he was about to make one of his biggest investment till date.
However, he did not want the property to be vacant till he and his family choose to frequent it. He wished to rent it out and generate money in the form of rentals. Thus, he had ensured that the income not only takes care of the maintenance cost but, also adds up to his savings.
Along with that, he kept the following factors in mind to make the most of his second home investment.
- Location – Early in his property search, Yogesh realized that the location is going to play an important role along with the probability to rent it out. The view, access to modern day amenities and connectivity plays a major role. The properties in Panvel come with all of the above and this led him to zero in on Hiranandani Communities as one of the developers. However, being his second home investment, he was careful about the buying price as it may impact the return on his investment.
- Costs – The cost of the property plays a major role. Can you afford a second home is the bigger question to answer. Along with that, the income tax law also needs to be kept in mind. He was aware of the maximum deduction on interest being capped at Rs. 2 lakh, along with interest on loans and rental income being taxable. Yogesh, had planned his finances well in advance and was in a comparatively good position to buy a second home without burning much cash.
- Infrastructure – Location and infrastructure development goes hand in hand. Yogesh had thoroughly done his study before finalizing a property in Panvel by Hiranandani Communities. A good location should not just include the property and its surroundings, but also the infrastructure development around the property. Ideally, higher rentals can be expected near educational areas and corporate hubs.
- Rental income potential – Identifying a good property is not enough, especially if you are expecting rental incomes in future. A good rental income can offset some of the costs of owning a second home and Yogesh was well aware about it. He had done a recce in and around Panvel and got a basic idea about the rentals he can expect.
- Purpose of buying a second home – Yogesh had clearly identified the purpose of buying a second home before even searching for the properties. He did not just finalize the property in isolation. He consulted his family and friends before taking the final decision. Property situated around fast-developing areas augurs well for providing high returns on investment.
Buying a second home is a big decision and like any other real estate investment a thorough due diligence is required. Yogesh had done all of the above, had taken a fair amount of time and displayed tremendous amount of patience to acquire a right property.