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Ever wondered why many people in India are considering buying a second home in addition to their main residence? In this blog, we'll discuss why. Owning a second home can offer personal enjoyment if it is bought for the purpose of holiday or weekend getaways, but more importantly, it can also be a valuable investment opportunity. Properties that are located in high-demand locations can generate rental income and increase in value over time, making them a smart long-term investment.
The trends of investing in second home properties in India have grown significantly since the pandemic. According to an article by The Financial Express, the second home market is growing at a Compound Annual Growth Rate (CAGR) of 23.6% since 2021. This growth is driven by various factors like the rise in disposable incomes, changing lifestyle preferences of individuals, and attractive investment opportunities available in the market.
Along with these factors, the Indian economy has seen high growth in recent decades, leading to a rise in the number of middle and upper-middle-class sections. With higher spending power and a desire for a better quality of life, these sections of the population are seeking second homes as a means of investment.
Renting out a second home can provide a regular flow of passive income, helping to compensate for the costs associated with ownership of the property, like mortgage payments, maintenance, and other bills.
The rise of remote work and the digital nomad lifestyle among the new generation of workforce has also created a growing demand for long-term rentals, allowing second homeowners to earn consistent rental income over long periods of time. This trend has made second homes even more attractive as investment options in India.
Investing in second homes located in high-demand, low-supply areas can generate high returns in the form of capital appreciation, which makes it an attractive investment opportunity for people seeking long-term wealth creation.
Looking at the growing demand for second homes, developers have also responded by launching a variety of projects according to the needs and wishes of each segment of investors. These projects feature state-of-the-art amenities, such as clubhouses, swimming pools, golf courses, and recreational facilities, designed to enhance the living experience. Further, many developers are incorporating smart home technologies and eco-friendly features to appeal to the new-age buyer.
To make second home ownership more accessible to all kinds of buyers, developers today are offering flexible payment plans and attractive financing options. These include subvention schemes, which basically means the developer bears a portion of the interest cost during the construction phase, and deferred payment plans that allow buyers to pay a big portion of the cost on a later date, usually upon possession.
As the economy continues to grow and income levels rise, the demand for second homes is only going to increase in the future. For investors, second homes present an excellent opportunity by providing a steady stream of rental income. Renting out second homes when not in personal use can help compensate for ownership costs and generate high returns, making them an attractive investment option. Now that we’ve discussed all the factors contributing to the rise in the demand for second homes, you can confidently consider this an investment option that also has the potential for providing stable and continuous returns.
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