Investing in a Holiday Home? Know 5 Things to Keep in Mind

The desire to escape the congested environs of jam-packed and active Indian cities is burgeoning. Not surprisingly, the demand for vacation homes – getaways located in a calm, quiet spot away from the city – is booming. Even for people who are not particularly inclined to find getaways often, vacation homes are a great investment opportunity from a renting-out point of view. Platforms like Airbnb and OYO have successfully presented vacation homes in a completely different light for young tourists. If you want to invest your capital in a peaceful home away from home, here are five things to keep in mind so you get a bang for your buck.

Double-check your finances

Buying a vacation home is not a one-time investment. You will have to spend not only on the house itself but also on its interiors, security, and general caretaking and maintenance. This means that you will be shelling out some notes every month to pay salaries and some bills. There are also certain tax implications to keep in mind. It is advised that you only invest in such a property if you have assured long-term surplus capital or income.

Pick your purpose

The kind of arrangements, financial and otherwise, that you will have to make for a house will differ based on whether you want to rent the place, use it regularly, or keep it aside for resale. For instance, if you want to rent a place, sticking to popular taste would be better. But if you want to use it, you might want to find a house more suited to your personal taste.

The perfect spot

Selecting a location relies heavily on the purpose of the vacation house. In case you want to set it aside for resale, you will want to pick a location where ballooning price will be the top priority. However, if you want it for personal use, you would prefer it to be closer to your usual residence to allow easy access for travel, regular checks, etc.

Resale value

Resale value of a vacation home will depend on the location, projections for the future, demand, how well it fits the taste and preferences of the time. Remember that real estate appreciation does not take place as quickly as in metropolitan areas. Moreover, reselling such houses can be difficult as the demand arises from people’s aspirations rather than necessities.

Ownership model

Explore various ownership models in place before investing in the house. Fractional ownership, a shared ownership model, for instance, is gaining momentum these days.

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