Planning To Buy A Second Home? Follow These Tips
Forty-seven-year-old Rohan Khanna, the father of two and working at a multinational company in Gurgaon, was planning to buy a second home. Though he had a "been there done that" feeling, as he already owned an apartment in Gurgaon, he still needed clarity on certain things. He called up his real estate agent, who shared with him the nitty-gritty of buying a second home.
It is true that buying a second home comes with its own set of dos and don'ts, which are slightly different from those for the first purchase. MakaanIQ shares certain things you ought to keep in mind if you are planning to buy a second home.
Know your finances
First things first. Check your finances. Do you have enough savings to make a down payment and manage the equated monthly instalments for the home loan you would avail of? Also, ensure that you are debt-free before you buy another home loan.
Know the purpose
A second home is generally bought for any of these three purposes -- for investment, as a rental property, or as a vacation home. So, before you plan on investing money on a second home, know your purpose and plan accordingly.
Select the right location
Based on the purpose of investing in a second home, pick the location that would fulfil the purpose. An investment property should be bought at a locality which is still under development. The rental property should be purchased at a place that has a well-developed civic and social infrastructure, so that you can easily find tenants and earn good rent, too. For a vacation home, a locality away from the city and close to the nature should be your pick.
Adding another home to your kitty doesn't come easy. For whatever purpose you buy your second home, the initial set-up or staging, monthly maintenance, bills, wear & tear, and renovation once in a few years, are the expenses that you will have to deal with. A second home will double all the expenditure you were making on your first home. And all this will be for a property you will be dwelling in once in a few months, or not at all.
So, when you check your finances, keep these costs in mind.
Hire an agent
To ensure all this process is smooth and you invest in the right property, hire a real estate agent. An agent would help you calculate your savings and, if your finances are in good health, to make this investment. He, because of his expertise, would know the current and future market trends, and the right market based on your purpose of purchase. So, he would help you get the best deal and also help you while negotiating.