What should a Lay Man Know about a Second Home?

Well, there are so many people who are using the term ‘second home’. Have you ever thought about what it maybe? Actually, this second home is a kind of home you don’t live or stay in full-time. The primary purpose of this second home is not as a rental property.  However, there are many people who even put their second home on rent while others keep it empty.

It is always good to know about types of homes and here you can have a quick look. With this thing in mind, here’s a quick rundown of what makes a home a type of second home and why it is crucial to know. Once you know about different types of homes, you can also plan something like getting the best 2nd home near Mumbai or in other areas. For now, keep on reading for a better understanding.

Three types of homes

For most of the purposes, you may find the residential properties getting grouped into three categories like:

Primary residences

Now, this is the home wherein you live in most of the time. The exact or clear definition depends on who you really ask, but mostly this is defined as a home you owned and actually lived in for at least two of the recent five years. Most of the times, a primary residence is the type of home where you live most of your year. It could be close to where you work.

Second home

Speaking of second home, this is a home you possess that’s not your primary residence, but its primary function is not as an investment property. To qualify as a type of second home, you should live in it for minimum part of the year. Moreover, sometimes, second is misleading as you may own multiple homes too! But often, second home is used because mostly people have the main or primary home and then the second home.

Investment type of property

Now, this is a home or residence you own for the primary goal of renting out. It is not to say that you can never really use an investment property for your personal use. But the main function of the home could be making money for you. Of course, you purchase a home and you put it on rent for primarily making money or extra income. 

What makes a second home, exactly?

Now, when talking about tax purposes, a property can be seen or considered a second home under two circumstances:

• You live in the second home for at least fourteen days every single year.
• You live in it for ten percent of the days you rent the house out.

Remember that you have to content the greater option. For example, in case you rent out a specific home for one hundred eighty days of the year and live in it for just 18 days or more, it is going to be considered as a second home for factors like the mortgage interest deduction. And so on.

Conclusion 

SO, when are you going to check out some wonderful 2nd home projects near india and get one for yourself?