Investment in property and investment in vacation homes are two distinct approaches to investing, each with its own benefits and considerations. Hill Homes presents a comparison between the two:

Investment in Residential Property

Income Potential

Investing in properties such as residential or commercial buildings can provide steady rental income. Long-term rentals or lease agreements can generate consistent cash flow, making it a popular choice for investors seeking regular returns. In general these investments can fetch 1% to 3% return on Investment per year.1% to 3 % return on investment is Low rental yields in property means that property investors now hesitate from typical residential property investments.

Appreciation and Capital Gain

Real estate investments have the potential for property value appreciation over time. If you choose the right location and make smart investment decisions, you can benefit from capital gains when you sell the property in the future.

Diversification

Property investments offer diversification in an investment portfolio. Real estate often has a low correlation with other asset classes like stocks or bonds, which can help mitigate risk and create a balanced investment strategy.

Tangible Asset

Real estate investments provide tangible assets that you can physically own. This aspect can be appealing to investors who prefer to have control over their investments and appreciate the potential for property improvements and customization.

Investment in Vacation Homes

Personal Enjoyment& matter of pride

One of the significant benefits of investing in vacation homes is the ability to use the property for personal enjoyment and owning a vacation home is matter of pride. You can have a dedicated space for vacations, weekend getaways, or family gatherings, or for friends, adding value beyond financial returns.

Rental Income Potential

Vacation homes can be rented out to tourists when not in use, generating rental income. Depending on the location and demand, vacation rentals can yield higher rental rates, particularly during peak travel seasons. This income can offset ownership costs and potentially provide additional profits. In general these investments can fetch upto 6% to 15% return on Investment per year.

Potential Tax Benefits

As the vacation homes are residential properties, there are tax advantages associated with owning a vacation home. Income tax benefit on home loan is available under Section 80 EEA, which provides income tax benefits of up to Rs. 1.5 lakh on the home loan interests paid each year. These home loan tax benefits are available over and above the existing exemption of Rs. 2 lakh under Section 24(b).

Appreciation and Lifestyle Investment

Similar to regular property investments, vacation homes can appreciate in value over time, potentially resulting in capital gains upon selling. Additionally, investing in a vacation home allows you to invest in a desirable lifestyle and location that aligns with your personal preferences, interests and budget.

Comparison of Investment Between Residential Property Commercial Property and Vacation Homes

SNO	INVESTMENT IN RESIDENTIAL PROPERTY	INVESTMENT IN COMMERCIAL PROPERTY	INVESTMENT IN VACATION HOME
1	CAN AVAIL LOAN FROM BANK (UPTO 85%)	CAN AVAIL LOAN FROM BANK (UPTO 60%)	CAN AVAIL LOAN FROM BANK (UPTO 85%)
2	COST OF PROPERTY IS MORE AS COMPARED TO VACATION HOMES	COST OF PROPERTY IS MORE AS COMPARED TO VACATION HOMES & REIDENTIAL PROPERTY	LOW INVESTMENTS (STARTS FROM 49 LAKHS ONWARDS)
3	FIXED LEASE PERIOD	FIXED LEASE PERIOD	RENTED FOR A DAY / NO FIXED PERIOD
4	1% TO 2% RETURN ON INVESTMENT	2% TO 3% RETURN ON INVESTMENT	8% TO 15% RETURN ON INVESTMENT IF OPERATED BY MANAGEMENT COMPANY / 20% TO 22% ROI IN CASE PROPERTY IS SELF MANAGED
5	MAINTANANCE REQUIRED WHEN VACATED BY TENENT	MAINTANANCE REQUIRED WHEN VACATED BY TENENT	PERIODIC MAINTANANCE ONLY
6	FIXED RENTALS	FIXED RENTALS	RENTAL INCREASE WITH DEMAND / CAN BE REGULATED BY OPERATOR
7	OWNER CANT USE THE RENTED PREMISES FOR SELF USE	OWNER CANT USE THE RENTED PREMISES FOR SELF USE	OWNERS/ FRIENDS / FAMILY CAN STAY WHENEVER THEY WANT
8	TAX BENEFITS ON LOAN	NOT TAX BENEFITS	TAX BENEFITS ON LOAN
9	DIFFICULT TO SELL IN PROPERTY IS OCCUPIED	DIFFICULT TO SELL IN PROPERTY IS OCCUPIED	CAN SELL ANYTIME
10	SLOW RATE OF CAPITAL APPRICIATION	SLOW RATE OF CAPITAL APPRICIATION	MORE APPRECIATION AS COMPARED TO RESIDENTIAL AND COMMERCIAL PROPERTY

HILL HOMES assists you to choose the right property of your interest of property type, location and budget to assure the best returns on investment. Our expert team can also manage your property as a Homestay under many options and plans of revenue sharing.