Should you buy a second home?

For one to decide on buying a second home, let alone the first, a self-enquiry will be the first step.

A few of the reasons usually are:-

1. As and when the family grows, one needs to look for a larger home.
2. Choosing to be near work/school.
3. Well-planned and Conscious Upgrade of lifestyle.
4. As the family nest becomes empty, wanting to move closer to relatives/children. Hence need for a change in location.

Unless there are valid reasons supporting the purchase of a second home, it should be viewed at par with other investments like Equity stocks, Mutual Funds, and NPS (Tier I and II).
If one decides to buy a house as an investment, there are a few questions to ask oneself:-

1. Will the rental yield from the investment justify the purchase?
2. Will one be able to take care of the maintenance of the property without much hassle?
3. Who will look after the house, when one moves to another location/country?
4. Will the next generation have an interest in the property?
5. Will one be able to liquidate the investment as and when required?
6. Will any other investment give better returns without the overheads of owning a real estate property?

Before purchasing a home for investment, it is always better to compare it with various other forms of investments and then arrive at an informed decision.

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