On her 40th birthday, Nisha received a special gift from her husband Ravi. It was the keys to a house. But this was not just any house. It was a beach house in Goa where they had spent their honeymoon 15 years ago! Needless to say, the house became their greatest asset. Even better, it turned out to be a profitable property too. Not only did Ravi get a tax benefit, he also made good money by renting it out to holidaymakers when they were not using it. Investing in the holiday home proved to be a wonderful idea for him.
If you have been wondering whether to buy a holiday home, take a look at the benefits of such an investment and decide for yourself.
1. A new property
A holiday home is an addition to your assets. You can use this property as collateral for loans, to boost your financial standing, and also to increase your property list.
2. Home away from home
Hotels can be expensive. So, you could avoid the hotel expense at your favourite holiday spot by living in your own house on your own terms. You can stay for as long as you wish without worrying about the billing machines running amok!
3. Income from rentals
You can rent out the home to holidaymakers when you are not using it, which can help you earn an extra income. This income can be used to pay the EMIs for the house, maintenance costs, utility bills, etc. However, be careful when renting it out. An unruly tenant can cause a lot of damage to your dream home.
5. Tax benefits
If you get a home loan to buy your holiday home, you can enjoy the tax benefits that come along with it. The interest you pay on your loan will be tax-free. This can be cost-effective for you.
6. Value appreciation
The property can act as an investment. It is likely to increase in value, depending on its location. So, you can sell the house a few years later and make a hefty profit. You can even mortgage it if you need urgent funds and get a good deal out of it.
So, as you can see, there are many advantages of buying a holiday home. If you buy it at the right time after doing a fair bit of research, it can become a good future investment. However, you have to consider your current financial standing before making the purchase. Go for it only if you can afford it. Just keep the above points in mind and make a wise decision.