Nov , 22

Investment in real estate is always considered as very much a profitable move for a safe and secure future financially. Thus many prefer investing their money in real estate. These days you can easily buy second homes in India. All you have to do is be a bit strategic about your finances. It is a huge risk and a huge investment to buy a second home. But if the course is set with precision following a strategy, then it could prove to be a great investment.

People are buying second homes for both investment and relaxation. If you or someone is interested in buying a second home in India, you should keep in mind the advantages and disadvantages.


HOME LOAN: Taking out a home loan helps a lot. You might not always have that many funds to buy a home in cash. So a bank loan will come in handy. Presently due to a pandemic, the interest rates have gone down to record low levels. There are even huge facilities available in tax returns for second-home buyers. Just that you have to plan your expenses properly so that you don’t face any problem paying monthly instalments. 

CREDIT SCORE: If you want to buy a second home, you need to meet higher credit score standards of 725 or 750. Your monthly income needs to be strong to afford it.

 REASON TO INVEST IN SECOND HOME: You need to analyse the reason behind buying a second home. Whether you plan to use the second home to earn rental or for self-occupation, you should have clarity for what this investment will fit in. You must know a second home is a great source of income for any age. At the least, you can put the home on rent even in bad times.

 EVALUATION OF BUDGET: Before buying a second home in India you need to evaluate a budget so that your financial aspect does not get affected. You need to check out a budget based on future costs like mortgage payments, taxes, maintenance and insurance expenditure. If your budget is fixed then you can shortlist a home based on that.

LOCATION IS CRUCIAL: The location of your second home plays a very important role. If you are buying a second home as an investment then the location needs to be prime with all facilities nearby. If your second home is in a place from where the transport facilities, the market, the entertainment places, malls all are closed then the demand for the home will go high making it a hot property and giving you an opportunity to raise the rental. If you are investing in a second home for relaxation or for staycations then you can buy it on the outskirts of the city, suburbs and places which are quiet. 

TAX BENEFITS: You should track out the tax benefits available on the second home. You may reduce your total taxable income by claiming the full interest paid as an expense from the rental income.

 INCREASE YOUR DOWN-PAYMENT IF YOU CAN: Usually, 5% of the actual amount is asked for the down payment but if possible increase your down-payment. If you pay a large sum of money like 32-35% as a down payment, then the interest rates will go down. This means you can pay off the loan faster. 

CHOOSE READY HOMES: If possible choose ready or almost ready homes in the present time. Due to the pandemic, construction works have been hampered a lot. Even though construction work has resumed all over India, housing projects are facing delays. Investing in under-construction property would not be a good choice. There are many already ready homes to invest in. But yes, a ready flat means more investments so choose wisely only if you can afford it.


  1.   You should not mortgage your first home to take out a loan for your second home.
  2.   Property taxes can be high depending on the location, so choose wisely.
  3.   Two homes mean two maintenance costs.
  4.   Without proper research work, if you buy a second home it might not be profitable for you.

 So buying a second home in India is not at all a bad idea. Be it for profit or self-occupation, a second home or you could say an investment in real estate is always a very good futuristic plan. It doesn’t mean you have to save money depriving yourself of all the luxury and necessities. It might be a bit of stress but with proper planning, you can succeed without having a heart attack. You just have to do intensive research, investment planning and a push to take the step of buying the home and be consistent with the plan. Rest all will fall into place. 


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