Buying a second home? Keep in mind climate and connectivity

Namrata Kohli  |  New Delhi

With the real estate market in India in upcycle, one segment that is witnessing rapid growth is second (including retirement) homes. A recent report by 360 Realtors says this segment is likely to grow at a compound annual growth rate of 23.6 per cent over the next five years. 

Goa, Alibaug, Lonavala, Coonoor, Ooty, Kasauli, and Shimla have emerged as the second home hotspots within the country. Several factors are driving this demand. With many companies willing to offer at least some of their employees the option to work from home, many people are investing in a second home in places that offer a salubrious climate. Some are investing for quick appreciation.

Says Dhimaan Shah, co-founder, Isprava, which offers fully furnished second homes priced between ~5.5 crore and ~30 crore: “If you buy with the right brand and invest in the right project, you could get appreciation within a short period.” Goa currently offers the best investment return on second homes. Some are buying a second home, so they can rent them out for long stays. “While in top-tier metros like Mumbai, the rental yield is barely 1 per cent, in a place like Goa, you could get 6 per cent or more with the right property,” says Shah.

Choosing right home 

Besides climate, choose a place with easy connectivity, so you can return quickly in case a need arises. Stick to a branded developer — one who has a track record of delivering quality projects on time. Decide whether you wish to buy the property for self-use, to rent out, or for investment. 

Says Gunjan Goel, director, Goel Ganga Developments: “To earn a high return on investment, go for a popular location. If you are buying for self-use, focus on whether it offers the amenities and infrastructure that suit your lifestyle.”

Buying within a gated community is prudent. Says Shveta Jain, managing director, residential services, Savills India: “Look for an independent home or villa within a gated development. Such developments offer greater security and you can enjoy facilities such as swimming pools, gyms, health centres, and state-of-the-art sporting amenities without having to worry about their maintenance.”

Ensure the area does not suffer from water scarcity. “Make sure there is assured water supply all year round. Water scarcity can be an issue, especially in the hills.” Go for a RERA-registered project, so that you have the option to complain if there are structural defects.

Look for clear land title 

Land title can pose an issue, more so in non-urban locations. If you are buying from a smaller developer, engage a lawyer to conduct a detailed title check. Make sure the seller provides you with documents such as title deed, sale deed, registration papers, pledged property, and encumbrance certificate. Make sure no utility bills, maintenance charges, and property taxes are due. 

Some additional due diligence may be required when investing in certain states. To invest in Shimla, a non-domiciled buyer needs permission under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972. But non-domiciled purchasers can buy a plot of land or apartment from a licensed builder who has taken approval under Section 118. Since property laws vary across states, it is advisable to engage a local property agent who can help you navigate through the legal maze

HOME RUN: KEY SECOND-HOME PROJECTS

City/Town	Name of Project and Developer	Approximate unit size	Price (₹)
Kasauli	DLF Samavana	1,500-2,500 sq. yard plot	4-6.5 crore
Kasauli	Tata Myst	4,275–4,915 sq. ft villa	5.5-6.2 crore
Naldehra, Shimla	Auramah Valley, Imperial Realty & Developments	4,000 sq. ft, 5,500 sq. ft (4/5-BHK villa)	3.3-8 crore
Alibaug	Green Park Developers	2,500-3,000 sq. ft built-up and 5,000 sq. ft plot	2.5-3 crore
Alibaug	Mahindra Lifespaces The Serene	3BHK villa 2,000 sq. ft 4BHK villa 2,500 sq. ft	3BHK 1 crore 4BHK 1 crore+
Lonavala	Tata Privé	3BHK 4,500 sq. ft	6 crore
Lonavala	Kalpataru Amoda Reserve	3BHK villa 2,600 sq. ft	3BHK 3 crore
Goa	Veera Developers	4,200-5,200 sq. ft built-up area	4-5 crore
Goa	Casa Del Sogno	3,229-3,500 sq. ft	3.5-4 crore
Goa	Acron Edgewater Villas	3BHK villas 3,500-6,000 sq. ft	4 crore