People usually say that when it comes to buying a property it is always better to start early in life. But actually is this correct? If you ask me the same question I would rather say it all depends on what you are looking at by investing in a second home and how much savings do you have at your disposal to buy one. Buying property early in life definitely has its attendant advantages.
For starters, property is one of the most secured investment options as it invariably witnesses good appreciation. So by purchasing property early in life, you are actually creating a security for the rest of your life not only for yourself, but also for your family as well. A property not only creates an asset, it creates a value-adding asset.
It, no doubt, makes sense to invest in a second home when you are still young because your mortgage period will also finish early, giving you more time later on to enjoy a mortgage-free life. Plus you can opt for a longer tenure of loan which means the EMIs will be lower. If you go in for a home loan at the middle of your career at the age of say 25-35, you can get a loan for 15 to 20 years. So the EMIs will be lower. Moreover, later in life, when you have accumulated enough funds, you can either repay the loan or increase the EMI amount too.
Banks and financial institutions are more inclined towards lending to youngsters than to people who have just a couple of years left to retire. So with a little intelligence of keeping all the papers up-to-date, getting a loan is not as difficult as it seems.
Having said that one should understand that many second home developments are not eligible for mortgages. Many of them are also subject to lending only 40-50% of the value of the property. So basically you need to have a good amount of cash at your disposal to realize your dream or look for a second home project that gives you maximum mortgage.
Owning a second home provides some tax relief too. There are some special tax rules and regulations that apply to second properties. Figure out what type of tax breaks you might get on a mortgage on a vacation home and you could save a lot here too.
Another advantage of buying a property early in life is that at this point of time you do not ideally have any major responsibilities or expenses like children’s higher education, etc. These expenses come later in life. So buying a property now means that even if you take a loan, it would have been repaid by the time bigger responsibilities come your way.
It is a widely accepted truth that youngsters travel or tend to take more vacations. So buying a second/ holiday home makes sense because it can cut down on your vacation expenses. Moreover because of the ability of the younger generation to network more effectively, they can toy with the idea of renting out their second home to travelers and thus start a holiday home rental business. This means you can break even with your investment vis-à-vis returns from short-term rental pretty early in life.
Whatever the economic situation, property prices hardly fall. Although we keep hearing that prices are falling or developers are finding it hard to sell their projects, in actuality when you approach them, you are invariably surprised to find that the prices have increased manifold in just a matter of couple of years. So buying young means you will be investing less now and will get a higher value some years from now. And most importantly it means that you can create an asset which appreciates in value with time.
While buying young means investing in a debt-free future, too much of financial burden is also not advisable. So, before you decide to buy, make sure that your debt-income ratio is at comfortable level.
There is nothing like having your own property early in life. Since this is one investment which will not fail you, even in the worst of circumstances, despite the risk that the appreciation in value may be a bit slower, you are most likely to benefit in more ways than one.
Want help finding a property overseas? We have listed the top destinations in Asia for retiring, investing, and buying right now. Our project reviews will help you make your dream of owning a holiday home a reality. Just click on the country, browse the properties we have featured and contact the developers directly:
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