In recent years, the demand for investment in the second home has witnessed a huge jump among property buyers. While some purchase it for vacation, recreation or leisure purposes, the majority of buyers invest for future asset creation. Not only, these homes can offer good rentals but also help you in earning high profits and returns on Investments.
According to experts, the demand for such homes has increased in the last few years in the Indian real estate market. Especially, those among the HNI and NRI segments are finding such investments more attractive as well as income-generating.
With this blog, let’s understand the benefits of second home investment in details:
Most of the property buyers purchase a second home to earn good rentals. It may be via renting it to families or working professionals or converting it into student housing or PG accommodation. These days’ people are also renting it out for commercial use like shootings, weddings, vacation homes and much more. This trend has increased by leaps and bounds in recent years as not only the uber-class but the middle-class segment also looking for such homes to spend quality time with family members. Some top localities were you can earn good rental income from a second homes include Mumbai, Goa, Pune, and Bangalore as these areas are surrounded by many scenic spots which are also termed as weekend gateways.
High Profit and Returns on Investment
A second home offers high profit on investments and that’s why they are considered as best future assets. Besides this, the demand for resale units has surged immensely among home buyers due to delay in delivery of under-construction units and high value of ready-to-move-in properties. Apart from this, the elimination of GST on resale units also calling more and more buyers to purchase such homes that help the second home property owner in earning good returns on investment.
Enjoy Tax Benefits on Rent Received
With government announcement to abolish income tax on the deemed rent; now a second homeowner can enjoy benefits in this segment too. Earlier, the rental income was taxed, but now the national income from the second homes that have no outstanding loan and lie vacant will not be taxed.
All these tax benefits can be availed under section 80 (C) of the IT act. However, the deduction is only allowed on the interest and not on the principal amount borrowed by the buyer.
So, with these benefits, investing in a second home is much fruitful for a property buyer. But then, as said any investment needs prior and vigorous research, same is the case with a second home too. Consider factors like location, RERA registration, the background of developer, etc. before making an investment decision.
Also Read: Know the Tax Implications on Second Home