By Rohit Kothare on Nov 22, 2019 12:28:24 PM
A real estate investment is the best place and a safe investment for one's hard-earned money. Especially in India, no other investment offers better ROI than real estate.
Hence, we provide you with the advantages and disadvantages of - why a second home investment in Pune is an even better idea.
The pros of buying a second home in Pune include some emotional and some financial gains like:
Long term appreciation:
Real estate investment promises you high returns with low risk. To give you an example; let us imagine you bought a house in a location like Baner or Hinjewadi years ago while it was still being developed & today that same investment must be double the value.
Make Retirement Life Secure:
The sound retirement plan to have is owning a second home. It is a prominent money generation tool for you in your retirement age and promises to give you financial independence. Also, later on, if required, you can sell the property for a considerable profit.
The best way to claim a specific tax deduction is to buy a second home. It will help save you on income tax. This tax deduction may not necessarily offset the cost of owning a second home entirely, but it can surely reduce it to the point where it gets a lot easier to manage.
Related Post - How to Save Tax on Real Estate Investment?
For Rental Purpose:
If you purchase your second home near to an IT work hub or educational institutes, then you can use it as rental purposes, and can earn lots of money from it.
In this way, your second home becomes a source of rental income. That rental income may even cover the entire cost of keeping the house on an annual basis or at least come close enough to it to reduce the financial burden.
The Cons of Buying a Second Home in Pune
We understand how exciting it can be to purchase a second home but there are downsides that you should consider before buying.
A second home is a MAJOR purchase
It is a different thing to purchase a widescreen TV, a second car but a second home is a significant purchase. That is why, depending on your financial situation, to invest in purchasing a second home could be life-altering, in a way that isn’t so pleasant.
Moreover, apart from regular carrying costs, there are chances of additional repairs and maintenance costs.
It could reduce your ability to make other investments
It is essential to understand that the money that you invest in a second home will include the carrying costs to maintain it.
You might have difficulty funding, paying off debt and saving money for investing in other instruments. As there will be ups and downs in the value of the home, and the real financial payoff will only come when you own the property for many years.
You may not use it as much as you expect.
You need to understand that buying a home isn't like purchasing expensive “toys”, where you hardly use them. Hence, you need to be sure that you and your family are ready for this huge investment. As the desire to use it as much as initially planned can wane.
In case you are considering buying a second home, then be sure you understand the reasons why you are buying one. Also, keep in mind that real estate is a long term investment opportunity and you need patience when your aim is to gain profits in the future.
Finally, India is a developing economy which goes on to prove that people’s lifestyle and earning capacity will increase. This will lead to demand in real estate and at that time you would be in a very good position to encash on your today’s real estate investment.
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