Buying a second house has its own advantage. From giving you a source of rental income, tax exemptions to the long term benefit of capital appreciation, the advantages are endless. However, one needs to be careful when investing in another property to make sure the investment does not go wrong and gives him the benefit of the same.
The property prices are pretty high across the country; you can fulfil your dream of owning a second house by making a careful and informed decision. The first step is to analyse your budget carefully so that it doesn’t shake your monthly budget and you are able to save enough money for a rainy day. Second is that the buyer should know the motive behind buying a second house while safe guarding your short term interest too.
When finalising the budget you need to keep in mind additional charges like stamp duty, registration charges etc. buyer will also have to figure out his loan eligibility. There are calculators online that will help you find your loan eligibility. The banks can pay as much as 80 percent of the total price of the property, the rest 20 percent you will have to pay by yourself. So make sure you have that 20 percent of the money saved with you. Try not taking a personal loan to pay for the 20 percent.
You can combine your spouse’s income to make sure you are eligible for higher loan amount. The CIBIL makes sure you have a good credit score more than 750, if you are applying individually whereas it the credit score needs to be higher if you are applying for a joint loan.
Deciding for what purpose you want the property for is crucial. Whether you want to rent it out further or use it for personal use or it is just for the sake of investment. You should also make up your mind to decide whether you want to buy an apartment or a residential plot.
When you decide to invest in second property make sure you have enough money saved for emergencies. You also need to keep in mind the needs and requirements of your family for the next five years. Education and the expense of living are increasing every year. Make sure you have money to cover them. Real estate investments are a long term investment and there are chances that you may incur losses if the property is sold in an emergency.