The trend of buying holiday homes in the outskirts of a city far away from maddening crowds and the jarring sounds of car honks is quickly picking up in India. Most of us love the idea of owning a house on the beach or a hill station. However, buying a holiday home is certainly not something a person with an average salary would do. Neither someone looking for his first home will buy a holiday home as his first house.
Mostly people who are interested in buying holiday homes are people with surplus investments after buying 1-2 houses in major cities of India. This segment of people is definitely expanding. Points to remember before buying a holiday home:
Take a well-thought decision:
Buy a holiday home, only if you have cash to spare! In case, you are planning to buy a house since your family is growing or your kids need a garden to play in, go for a bigger house and not a holiday home in a remote location. If more than living, monetizing your holiday home is on your mind, then maybe you are on the right track. The purpose of buying a holiday home should be absolutely clear in your mind before you take the buying decision. After all you don’t want your dream holiday home to burn a hole in your pocket with you realizing it too late that you took the wrong decision of purchasing it!
Choose the right location:
Even though you want to buy a holiday home away from the hustle bustle of the city, you should ensure that you don’t buy your home in a very remote location. Your holiday home should be close to essential facilities such as markets, hospitals and eating joints etc. Moreover, in case the holiday home is your second home ensure its not very far away from your current home so that you can easily visit and keep a check on the new house. Ensure you buy a property only in areas which have high growth potential.
Return on Investment:
Every investment needs to generate good returns to make it worthwhile! If you buy a holiday home in a good location, the appreciation will be higher, which will make it lucrative if you are looking towards reselling it or renting it. The best deal you can crack and earn some good returns is by renting the property whenever you are not staying in it. The additional income will help you in maintaining the second property and will also help you avoid situations wherein your holiday home is vacant for a very long period of time.
Cost of Taxation:
Your holiday home is not going to be tax free. Make sure you are all set to pay taxes on your second property. In case, you sell your holiday home within a period of 3 years of purchasing it any capital gains arising from the sale of property will be taxable.
Maintenance of a home away from home is definitely not easy. Maintaining a holiday home on a regular basis needs quite a bit of extra cash since you need to hire the right set of people to take care of the same. Moreover, reselling sometimes becomes a problem since not everyone requires a holiday home so the number of buyers comes down. Security is also a problem in holiday homes situated in interior or remote locations.
In case, you have analyzed all the above pointers and are quite sure that you want to buy a holiday home, what’s stopping you? Go ahead and buy one for yourself and enjoy your vacation in your very own holiday home!