Buying a second house for investment: For me, it's simply not | FitRichSane

Buying a second house for investment:

For me, it's simply not worth it.
This is even though I have good friends, and very successful members in this group, who do own such second homes.

Here's why I don't suggest it:

*No transparent pricing. You are dependent on a broker when buying and selling.
*Not a great chance of price appreciation, with the over-availability of flats in many areas.
*Rental yields typically hovering around 2-4%. Remove from this the regular maintenance, taxes, interest paid if you take a loan.
*Possibility of getting stuck with a bad tenant. Happens with the best of us.
*For most of us, 2 homes will seriously skew our overall networth heavily towards real estate


Here's the first test I suggest:
Let's say you finalise an apartment where you want to make this investment.
Call a broker saying that you want to buy a flat there.
Now get someone to call the same broker saying that you own a flat there and you want to sell it. This should give you an idea