The Questions to ask before buying a Second Home
If you are or have been a second home buyer, you would have definitely faced the following question:
Should I buy the second home as an investment or as a family vacation getaway?
And as any home buyer, you would invite suggestions with friends and family. Your family may want a weekend getaway on the outskirts of the city, perhaps near a hill station amidst pollution free environment. While, your friends would recommend you purchase a house in the city so it can be rented out so that it rakes in some moolah too.
The ‘purpose’ for which you wish to buy the house should be the deciding factor for the type of second home you wish to purchase. Therefore ask the question:
Which is better - A holiday home in the outskirts or a home in the city?
A holiday home would fetch occasional rental income when the family is not using it. Also, emotional attachment may turn into a hurdle when selling the property. Hence, this choice can be seen as an indulgence rather than an investment.
An apartment in the city would generate a decent rental yield as the years go by which could serve as a good source of retirement income & It can also be sold off easily.
The next question would be:
Which location and what size of the house should I look at?
A scenic picnic spot or a noisy urban area - in both cases keep in mind the kind of rental demand in the area, the proposed & existing social and civil infrastructure, connectivity and the overhead costs of maintaining the property. The upcoming locations like a tier 2 or tier 3 city is a good bet to take a second home in instead of a vacation spot which is more of a as a tourist destination.
The size of the home would completely depend on the purpose for which it is intended. If you wish to have weekend getaways with 2 families or a group of friends, a larger house would better serve the purpose. A holiday with just your close family unit would need a smaller house. Similarly, in the city, if you wish to earn rentals from nuclear families a smaller house would suffice and if you wish to sell the house to a family (joint or nuclear) a 2 BHK or 3BHK would be perfect.
Owning a second home can be a rewarding experience. However, one must be clear about the purpose of investment and select the location and property according to one’s needs.