There are various reasons people buy a second home – a retirement home, a vacation home for summers or winters, as an investment, and for wealth creation. No matter what is your reason for purchasing a second home, it is a decision that must be taken with careful planning of finances and an understanding that, if you are not planning to live there for any amount of time, and if you are not planning to rent it out, it is going to need maintenance, every now and then.
There are many other such things that you must know before buying a second home. Here, we share some of these things that you must consider before buying a second home, whatever be your reason for making the purchase be. We recommend you read the following post carefully to make your investment a perfect one.
Don’t forget the following while purchasing a second home
What is the location and what is the type of establishment?
When it comes to real estate, location takes precedence over the sales price. The location varies as per your reasons for buying a second home. For example, if you are planning to buy a second home to enjoy a summer vacation, you might be looking for a particular place.
Well, whatever might be your reason behind making the purchase, location is of even more importance in the case of residential properties.
Similarly, you must determine the type of home you want, right from the start. You must talk with your family, friends and any other acquaintance that has knowledge of real estate, or consult some reputed property advisor for choosing the right home.
Set a price range and a buffer, but don’t exceed it.
When it comes to investing in the real estate sector, it is extremely normal for people to exceed their budget. They often end up buying a home that is more expensive than the planned budget. While it might not be a problem for people with strong financial standing, it can be a messy situation to get out of, if you have a limited financial capacity.
The best way to tackle this situation is to set a price range as per your budget and attach a buffer amount to it. Now, if you find a house that is out of your initial budget, you know how much more you can spend to buy this house, without hurting your finances.
Tax Planning is a must.
The property taxes are a reality that you have to face whether you like it or not. Further, your investments are also under the radar of tax authorities. So, if you are planning to buy a second home in some foreign place, we recommend consulting a reputed and reliable property advisor first.
This way you will be well-aware of the property laws, property taxes, and the other hidden costs that might come along with it. This way, you will always be safe from any type of tax problem.
How are you going to use the property?
This is one of the most crucial things that you must consider before making the purchase. For example, whether you are planning to move there, or you are going to raise it on rent, or you are going to re-sell it when the market is favourable or you want to simply let it be as an asset?
Understanding these things will allow you to make a purchase decision that is wise and pocket-friendly. You can also consult with your friends and family to have a second opinion about the purchase.
You must have a clear view and understanding of this thing right from the start – how are you going to maintain the property and protect your investment. If the second home is located nearby the current home, you can easily keep an eye on it and maintain it regularly. Always remember, properties always require upkeep and maintenance.
However, if the second home is located far from your current home, you have to think about its maintenance carefully. You can also rent it out if you can buy a budget villa in Kochi for regular maintenance and upkeep.
Further, you can also use it for travelers looking for budget staying options and employ some caretakers. However, your supervision and regular visits are still going to be of extreme importance, as you might not know how the other home is being used and what the level of upkeep in your absence is.
Some other things that you must never forget while buying a second home are:
- Are there any additional or hidden costs?
- How is this property going to affect your regular taxes?
- Are there any disputes over the property?
- Is the property built on approved land and as per the guidelines from the govt, or not?
- How much loan do you need to buy the property and whether taking a loan is a wise decision or not?
We hope this discussion is helpful for all our readers. We recommend you consult a reputed property advisor before buying the property for the best decision. It is good to buy a second home if you consider an investment in real estate especially from builders in Kochi and other near locations.