“What is more agreeable than one’s home?” ― Marcus Tillius Cicero
Having a home is the ultimate goal of working for some people. There are people who want to invest for the sake of buying it, once they start earning money. Home is the first priority that everyone has on his or her list, and this is quite wise and obvious because that is the place where you can go and seek refuge when you need rest. Having your own house is nothing less than bliss in today’s world when the price of real estate is booming. Every day, the prices are escalating, and hence, buying a property is becoming more and more difficult, whereas selling it is becoming easier. Investing in real estate is the best method of investment. Owning a house is essential for any individual or family, but investing in another one, apart from your primary residence, is the best way to invest money if you have that kind of money. Now, the question arises that, if a second home is bought, then how is it going to be profitable, apart from its resale value?
Why should I Invest in a Second Home, which would add to my Annual Expenses?
It is true that it might add to your annual expenses, but then, there are many more advantages to it than disadvantages. If you have money, you would definitely like to invest it somewhere where it would multiply, but given the kind of fluctuation the market goes through every day, you might just end up investing it in the wrong place if you are not a pro in the field of investment. The next thing that you can do is save the money in the bank, but though you get a minimal interest rate, you certainly pay taxes for the same. So, you have to face either risk or taxes, but is there a way out? Yes, investing it in a property is much more beneficial; you might pay the personal property tax, but at the end of the day, the house might just yield you the lost money. It serves as a backup for your hard times. You can also put it out on rent or keep it as a vacation home for some solitude, when you want to get away from the din of the known surroundings.
Will I get a Home Loan for It?
Yes, certainly, if you do not have enough money to put in for the loan, you can go for a mortgage, which is almost the same for primary and second homes. Even if you declare your second home as an investment property, you would end up paying the extra interest of about 1 – 2 percent, though this is also determined to a large extent by the lender or broker who is handling your deal. As far as the down payment is concerned, one way of paying it would be to borrow from the equity of your first home. This is also going to save up on your taxes.
Things to Remember Before the Purchase
There are a few things that you might like to check before buying a second home, and the following is a list of the same:
- Possibility of renting the house
- Condition of the house that you are buying
Whenever you decide to buy one, do proper research as to when you want to buy it and the investment plan because the whole point of purchasing it is to be able to save some money. Hence, give it as much consideration as you would have given to long-term investment. Do not hurry because, while buying it, there is no urgency as to where you would live in the meantime. So, take your time and buy a beautiful home, which would be the second haven for you that your feet would leave, but not your heart.