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North Kerala as a hot spot for vacation homes and retirement homes |
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While Kerala is famous for its beautiful beaches and backwaters, as you move further from the coast and leave the beaches and backwaters behind, you will find the roads winding upwards along the Western Ghats that are the hill ranges in Kerala. Kerala has many beautiful hill stations like Munnar, Idukki, Wagamon which is at the south and Wayanad in the north. These beautiful hill stations are also the sources of famous spices in Kerala. Spices such as pepper, tea, coffee, cardamom have been grown in plantations on these hill stations in Kerala, for centuries.
The southern Kerala is crowded with tourists and hence a bit crowded. Because of this the room rent, Ayurveda treatment costs, real estate etc. have gone over the roof. Because of these reasons tourists are moving towards north Kerala and Wayanad is a natural choice for weekend getaways. The tourism potential for Wayanad is yet to be tapped and if you are someone thinking of investment then you can buy a resort or buy a vacation home for almost the price of renting resorts for a big vacation in other parts of Kerala. With the new regulation foreigners can buy built properties in India easily.
An escape home in the lush green hills of Kerala with almost zero pollution is something everybody dreams off. The temperature at wynad is generally 5 degrees lesser than most parts of Kerala. More and more people are going in for a second home/ retirement home, away from the hustle and bustle of the city, where they can unwind and Wayanad and the hill fringes of Kerala are the most favored spots for buying or renting vacation homes.
Located in the north east of Kerala, Waynad is 2100ft above sea level and the climate is pleasant all throughout the year.
Vacation in Kerala is never complete without a trip to north.
A fascinating trend from an economic perspective is the growing popularity among consumers to purchase a second home. Whether it is being used as a vacation cottage, it is rented out or is merely an alternative to one’s primary address, the purchase of a second home is typically viewed as a Status Good. Additionally, this trend runs exactly opposite to the Theory of Marginal Utility and it thus makes the discipline of Real Estate the great exception to the general rule. In every society, from the Marxist to the Capitalist, there is a fairly sizeable minority class which always has a surplus of cash from income or an ability to borrow sufficient for its expenditure to have simulative effects on the general economy. Whereas in past historical times this minority class consisted mainly of the royalty and the aristocracy, it now comprises something like 25 percent to 30 percent of the population of a developed country. Because the education system in advanced countries is as egalitarian and selective as it has ever been in history, and because the skill requirements of a modern advanced economy are higher than ever before, this minority class tends to be clearly divided from the remainder of the population in terms of intelligence, educational attainments and cultural tastes With extra spend able resources at its disposal and a fairly higher degree of education, knowledge and experience, it comes to a point where this minority class focuses its energies and resources to the acquisition, holding, perusing, renting and reselling of consumer items which are out of reach of the remainder of the population at large. As such, these items have a distinctive connotation denoting a higher status within society – if none other than in the minds of the beholders, and are called Status Goods. A second or subsequent home is possibly the crown jewel of all consumer goods and the quintessential status symbol. More specifically, a Status Good is a purchasable item which becomes fashionable enough to have an effect on consumer spending, sufficient to produce a significant boost to the general economy of a nation, or a region, or a culture. The main motivation driving its purchase and use is that of denoting high status in society. Because of its desirability the price of a Status Good is able to carry a high profit margin and thus new providers enter the scene quite quickly with competitively high prices. This explains the recent development of resorts areas throughout the world. As stated before, the purchase of a second or subsequent home runs exactly opposite to the Theory of Marginal Utility. “Marginalism” is the economic line of thought that postulates the notion that what is most important for decision-making and to determine economic value is the marginal or last unit of consumption or production. For example, one automobile is very useful for getting around. An additional automobile might be useful in case the first is being repaired, or for spare parts, but it is not as useful as the first. A third automobile has even less utility than the first two. Given the price of cars, one would not expect many people to own three cars because the benefit they receive on the third car would be unlikely to exceed the price. In essence, “marginal utility” is the additional benefit that a consumer derives on an additional unit of a commodity output. Such additional output is said to have economic value if the additional benefit exceeds the price of the output. The concept grew out of attempts by 19th-century economists to explain the fundamental economic reality of price. As it relates to real estate, therefore, the usefulness of a second or subsequent home should diminish and, in accordance to the Theory, so should its price, so that second or subsequent homes should not possess economic value and, thus, demand for them should be minimal to none. Clearly, this is not the case in that real estate is not viewed as a disposable commodity but, rather, it is perceived as an appreciation-generating vehicle - a real capital asset. As proven empirically, second homes as Status Goods are a vital component of consumerism, in that they stimulate demand and production and, thus, economic growth.
Article Source: http://EzineArticles.com/?expert=Luigi_Frascati
Is Second Home Ownership In Your Future?
For some, purchasing a second home is a financial strategy to help them grow and protect their wealth -- and certainly vacation getaways may provide rental income opportunities to help savvy boomers offset the expenses of second home ownership. Others may be motivated to buy a second home because it can be used as a “family retreat,” to be later transformed into a residence after retirement, and then handed down as a family legacy. Here are some interesting statistics from the NAR 2005 Profile of Second-Home Buyers: The typical vacation-home buyer is 55 years old with a total household income of $71,000. Investment-property homebuyers have a median age of 47 years with a typical household income of $85,700. 33 percent of vacation homebuyers wanted a second home close to their job or school; while 24 percent wanted the home close to their primary residence. Nearly one out of five second homes will become primary residences after retirement. Because technology affords the freedom of telecommuting and “working where you play,” the decision to own a second home or resort property has been made easier than ever before. If purchasing a second-home is in your future, whether as an investment or for personal use, now is the time to get the information you need to make an informed decision. A qualified real estate professional can help guide you through financial considerations, assist you in finding the right community and even refer you to a resort property specialist for the destination of your dreams. Your real estate professional may even be able to get you the information and advice you need to use the equity in your current home to finance the down payment on a second home. If you are planning to use your second-home as a vacation retreat, make sure you consider your needs. Are you looking for a secluded location in the woods or somewhere with an active community? Natural beauty is great, but don't forget about cultural and social resources, as well as first-rate golf, tennis and other popular sports facilities when scouting locations. And what about location? For example, buyers from the Northeast are the biggest feeder market for second homes in the South. Many San Franciscans retreat to Lake Tahoe, while Bostonians gravitate to Cape Cod. However, there may be many great locations not more than two to three hours away from your home. You will likely get more enjoyment out of a property you can get to quickly and frequently. Since you know the area, chances are you'll make a better real estate investment closer to home. If your second home is mostly for investment purposes, ask your real estate professional about property management options, which can be a crucial financial factor, as well as important to peace-of-mind. Location is also a factor for those buying a second home as investment property, especially if appreciation or rental value is your goal. According to the NAR survey, the median distance between the primary residence and the investment property is 18 miles; and 44 percent are in the suburbs. There are also tax implications to consider with your investment. If you rent your home for 15 days or more in a year, you may have to declare the rental income. However, your expenses may be deductible. You'll want to confer with your tax advisor to learn how your purchase will affect you financially. How you use a second home is up to you, but make sure you look at each property with an eye toward tomorrow, because the vacation homes likely to appreciate the most are the ones that Baby Boomers can play in today and retire in tomorrow. Article Source: http://EzineArticles.com/?expert=Neda_Dabestani-Ryba
Vacation and Second Homes: Four Benefits of Vacation Homes According to a study by Harvard University's Joint Center for Housing Studies, college educated baby boomers are more likely to own second homes. The Harvard report states, "The estimated odds that a college-educated household head would own a vacation home vs. no vacation home are over four times more than that of a household head with less than a high school education." Benefits of a Vacation Home 1. Easy and Quick Mini Vacations You can get away from your hectic home life and enjoy a retreat without worrying about reservations, packing, and planning. If you set your vacation home up right, you can go for a break at the drop of a hat. 2. Income Potential Many vacation home owners have a property manager handle weekend and weekly rentals. In some resort areas, the income outpaces the mortgage payment. However, the real profit may be appreciation over time. The Real Estate Journal reported that a family who purchased a vacation home in Park City, Utah in March 2004 for $495,000 resold the property two years later for $945,000, a gain of $393,300, or about 79.5%. Also, you can tap into the appreciation and free up your equity for other investments with refinancing. 3. Quality of Tenants Generally, the type of person who rents a vacation home doesn't have money problems, respects property, and leaves on time. Compared to income property tenants who can cause eviction headaches and destroy property, vacation renters are the dream tenant. 4. Family Traditions Many families spend a summer vacation, Thanksgiving, or Christmas at their vacation home. The benefits of quality time: priceless. Article Source: http://EzineArticles.com/?expert=Jeanette_Joy_Fisher
Second Homes Are a Great
Investment The new millennium has not been good to stocks, bonds, mutual funds and other financial investments. Most investors have found that the best performing asset in their portfolio is their home. Real estate has been a safe haven for investors with appreciation far outpacing other investments. With the security and growing values of residential real estate, a growing number of home owners are now investing in a second home. There are a wide variety of reasons why people built or buy second homes. City dwellers may want a home in the country for weekends and holidays. Northern may want a home in the sun where they can golf year round; Southerners may want a home in the mountains close to a ski resort. A large number of Baby Boomers are eyeing retirement and are building second homes anticipating it will become their main residence. The primary reason for owning a second home is still lifestyle, however, the investment consideration comes in a strong second place. There are several reasons why owning a second home makes good financial sense. First, the appreciation of vacation residential property is expected to continue to rise for several years into the future. The changing demographics are a good predictor that second home ownership will continue to be strong for the foreseeable future. Baby Boomers reaching retirement age have more wealth than any previous generation and surveys show that ownership of a second home consistently ranks in the top one or two priorities for this group. There are also tax benefits to second home ownership. Mortgage interest is deductible for first and second homes making home ownership one of the best leveraged investments. Any profit on the sell of a second home is subject to capital gains, or better yet, if you move into your second home and live there for at least two years, you can avoid any tax on the sell of your property. With cell phones and high speed Internet, conducting business in a remote location is now a common occurrence. Being at the office full time is not as important as it once was and allows many executives and managers the luxury of using their second home more frequently than once was possible. Real estate has always been a safe investment. With a growing number of reasons why second home ownership makes sense, the demand for good locations and quality homes will rise. It is expected that second home ownership will be as common in the future as two cars are today for most household. Investment in a second home today will certainly be viewed as a wise decision in the future. Article Source: http://EzineArticles.com/?expert=Jennifer_Grimes
Big Jump
in Vacation Home and Investment Property Sales People are buying more getaway properties than ever before, according to a recent study by the National Association of Realtors (NAR). In 2005, in fact, four out of every ten home sales were bought either as vacation homes or investment properties. That represents a 16 percent jump from 2004, and amounted to 3.34 million homes. The study showed a distinct difference between vacation home buyers and those who buy investment properties. People buying vacation homes are generally looking either for lifestyle opportunities or places for their retirement. These properties can sometimes be a considerable distance away from their current residences. However, investment property buyers are usually looking for properties relatively close to where they live. That's because their motivation for buying property is completely different. Interestingly, the study found that the Midwest is the strongest area for both second homes and investment properties. Many people are looking for a nice modest-priced home in a smaller town where they can retire eventually, and such homes are still plentiful in the Midwest, according to the study. The NAR study seems to indicate that the Baby Boomer generation (who were born from 1946-64) are the main driving force behind the boom in second homes and investment properties, and as buyers, they're often willing to pay a premium price to get what they want. The median price of an American vacation home in 2005 was $204,100, which represented a 7.4 percent increase from the previous year. The median price of an investment property rose 24 percent in 2005, to $183,500. Across the country, more than one in ten Americans (11 percent) now own two properties, and another 4 percent own three or more, and those numbers are increasing at an unprecedented rate. The NAR study found that the median age of vacation home buyers in 2005 was 52, and nearly 20 percent of those buyers said that they were planning to use their second home as their primary residence someday. In other words, they're looking for places they can call home once they retire. This isn't just a one-time finding. Since the first wave of Baby Boomers are just turning 60, it appears that the trend toward buying second homes and investment properties is likely to continue for a good many years to come--perhaps for the next quarter century. Article Source: http://EzineArticles.com/?expert=Jeanette_Joy_Fisher
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