Tips to buying your second home

[caption id=“attachment_2343350” align=“alignleft” width=“359”]  Image Courtesy: Getty Images[/caption] Real estate has been a respectable and sought-after category in the well-heeled Indian investor’s portfolio for years now. Yes, the market’s been flat recently and we’re only just seeing a slow return to buoyancy, but not only are Indians still upbeat on property buys; the one’s that can, are still keen on buying second-homes as investments, or holiday homes. Through the last few years, property has been an investment class whose prices have not come down, which is possibly why Indian-investor sentiment towards realty is as upbeat as ever. Perhaps not in the posh neighbourhoods of Mumbai or Delhi, but Tier II cities and upcoming neighbourhoods in Tier I cities still represent a viable option for savvy investing. So if you’re looking at well-reputed/desirable projects (preferably ready-to-occupy/nearing delivery) in Vadodara, Jaipur, Ahmedabad, Trivandrum, Chandigarh, Nagpur, Coimbatore, Pune, and new localities in NCR, Chennai, Bengaluru and Hyderabad, you’re unlikely to go wrong. The luxury and super-luxury ends of the market, having an already small buyer base, receives particular interest from second-home investors. These are price-agnostic buyers with deep pockets and considerable holding power. But the middle of the spectrum- affordable but well-kitted out projects, where both supply and buyer-interest abound, is possibly where the second-home action is more lucrative. Furthermore, now’s not the time to rush headlong into large square-footage homes in untested townships and just-developing areas. Better to focus on smaller homes in already established localities with schools, hospitals, and a public transport infrastructure already in place. That way, you’re more assured of guaranteed returns in a 4-5 year holding period. Mid-range and ready-to-occupy apartments in neighbourhoods surrounding business areas that attract a salaried, floating, renting population are the most attractive scenario for the second-home investor. You’re looking at increasing property value, assured hassle-free rentals (and therefore loan-serviceability) and the guesswork of waiting for deliveries is non-existent. For under-construction buys, builder-reputation is key. Check for track-records on project delivery-deadlines and fulfillment of promised amenities and finishes. Preferably, also look for homes in easy-commute distance from already established business areas. Be sure of your holding power; because with real-estate, and depending on how you’re financing the buy, you should ideally have a holding capacity of at least 4-5 years. Research the markets in similarly-sized cities for similar-sized homes too, perhaps returns are more lucrative to park your money in a neighbouring city or district, particularly if you already work/live in a somewhat saturated market like Mumbai or Delhi. As always, talk to colleagues, brokers, other investors and your tax consultant and ensure that your second-home buy is the best option for you.