A recent real estate trend that is gaining a lot of popularity is the concept of vacation homes. Increasing wealth, changing mind sets and the growing need of maintaining a work-life balance, are the driving factors for increased demand of such getaways. Moreover, these second homes are not only looked upon as rejuvenation destinations but are also lucrative investment avenues. Let’s look at the reasons for the growing demand of this housing segment.
- Profitable Proposition:
Vacation homes not only provide an escape from the city’s hustle-bustle but are also excellent investment propositions. The value of such properties is subject to constant appreciation due to the location advantage. For instance, there is a finite shoreline and limited mountains on which houses can be constructed.
- Rental Income:
Since these homes are usually located in popular vacation destinations, leasing them out is pretty easy. Also, during season time, you could earn a hefty amount as rentals from these properties. Another advantage of rental income is that it will help you pay off your monthly EMI’s if you have opted for a home loan, thus reducing your financial burden.
- Tax Deductions:
A usual trend among people is to keep their vacation homes unoccupied, if not being used for personal consumption. Therefore, if you don’t rent out the property for more than two weeks a year, the interest on your loan and property tax will be deductible from your income. This will help you save a lot in terms of income tax.
More often than not, when deciding on going for a vacation, exorbitant hotel rentals and lack of affordable accommodations puts a damper on our plans. Conversely, if you have invested in a holiday home in one of your favourite locations, you longer have to worry about looking for suitable living arrangements.
- Retirement Head Start:
Though we absolutely love the places where we live and work, but every city has its drawbacks. For instance, in a place like Delhi, peak summer months can be excoriating while monsoons in Mumbai can be brutal. Imagine, if you did not have to combat these terrible weather conditions during your old age, instead you could retreat to a place of your choice. Vacation homes can make this aspiration come true.
In conclusion, vacation homes, though a recent trend is here to stay. Hence, if you are planning to invest in real estate, think about vacation homes.