Cliffton Valley

Every human in this world wants to grow in his life Emotionally, Mentally and Financially. Most of us wish to build or buy a dream house with the latest design interior, even if we own one already. Or some consider it as an investment. Apart from being a property investor, every Indian citizen, of any caste or category, can buy a second home. Want to know how?

All thanks to the Government of India. The constitution of India has granted a very beneficent law “Right to Property” for the betterment and up-liftment of Indian citizens. This law permits Indians of varied asset classes to purchase unconditional residential properties in India.

Second Home Buying Tips

 Buying a second home can be viewed as a strategic investment to strengthen long-term capital value. This is a very plausible idea with high potential profit in a diversified asset portfolio. But, there are a few things you need to consider while purchasing a second home:

  1. The location: Buying a second house can be a superb income generation tool, creating a substantial savings corpus over a long-lasting period, only if the location is correct. You must find a property in such desirable places where people want to visit. If you’re willing in hills or nearby beaches, lakes etc, the smart move will be to buy one more nearby your residence so that you can keep an eye on it, guard, maintain and acknowledge the repairs when necessary. Consider it as a vacation rental investment which you can lend as PG, Rest House, or Hotel Booking Cottage.
  2. Funds: In case, your financial condition doesn’t allow you to buy a second property, you may take a house loan, which is available o a very reasonable rate of interest. This loan is sanctioned only if you qualify for good CIBIL score.

Now, most of the banks or mortgage lenders approve the loan of only those clients whose total debt does not exceed 36% of their income. Secondly, the buyer will need to have a higher down payment saved for a second home (20% – 40%) and a higher credit score (725 minimum). Thirdly, while applying for a loan from a reputed bank, you can claim a deduction for interest payable on a loan as well. Under Section 24(b), you can easily apply for a home loan for property purchase, construction, repair or renovation of any property, be it commercial or residential.

  1. Best price: Are you sure about affording a second home? Analyze your financial report properly and get an accurate estimate of the total costs of investment for the property. Apart from purchasing the land or a flat/building etc, there are many more expenses which you need to consider before getting it. These include operating expenses, tax cost, and financial cost. Primarily, a home buyer needs to be aware of the tax deductions which he/she can avail which include expenses like monthly utilities, annual property taxes, HOA or condo fees, and insurance coverage. Secondly, there are other normal costs of maintaining a property like construction. Remember, real estate or property purchasing is an emerging top investment destination in today’s era. Just make sure its value remains escalating.
  2. Rental Potential: Your second home can bring some assured income if rented out as a vacation home rental for short-term guests. This is a lucrative idea but, it is not always necessary that your property is worth for “To-let”. For this, you need to make sure your second home lies either in a peaceful holiday location so that it can be rented out to tourists looking for a relaxing place on a weekend getaway, or a nearby town for it to be rented out to suitable tenants and can be a source of a steady monthly income. Hence, it is a crucial step for a buyer to invest in a good location. On the other hand, you also need to have a backup plan when there will be an off-season during which the place will be left vacant or with low rental income.

We at Chester Hills, Solan and Cliffton Valley, Shimla offer Studio/ 1 BHK/ 2 BHK second homes with fixed rentals post possession, call us for details.