Maximizing the Investment Potential of Your Second Home

There are plenty of reasons to buy a second home, from the convenience of being nearer to family to the luxury of having an always-available vacation destination. Today, more and more people are buying a second home as an investment — in fact, at least 37% of buyers claim that their second home was purchased for this very reason.

But seeing a return on this kind of investment goes far beyond simply buying another house. It pays to set your priorities straight, to do your research on the local area, and to get the most out of tax benefits while minimizing unnecessary costs along the way.

Read on for invaluable advice from real estate experts, so you can maximize the investment potential of your second home.

Buy Smart

If you’re buying a second home it means you’ve bought a house before and you know the ropes — to some extent. While buying a second home also involves a down payment, a mortgage, and other associated costs, there are some differences to be aware of the second time around.

Your second home probably has a more specific use, so it’s important to make sure that you choose an appropriate property. A vacation home should have all the amenities you require for a relaxing time away from your primary residence, while a home purchased to be closer to family should provide you with enough space to host loved ones during family gatherings. Buying the wrong kind of home for your needs could force you to spend more money later on to adapt the property.

Once you’ve found your ideal second home, you’ll need to get your finances in order. Lenders are more wary about second home loans and often require a higher down payment — up to 25% in some cases. Although a down payment of at least 20% allows you to avoid mortgage insurance and minimize interest payments, overpaying will affect the value of your investment. Finding this balance is an essential part of getting a second home.

Location Matters

When it comes to maximizing the investment potential of your second home, it may be a cliché, but it really is all about location, location, location.

Housing prices across the US remain relatively low, making it a good time to buy property as an investment. When choosing a vacation home or investment property, there will be multiple cities in the US that can meet your needs; to narrow it down, compare the real estate markets of states or cities you’re considering. 

Arizona, for example, is a popular vacation locale due to its pleasant weather and an especially smart choice in the current economic climate. Experts predict that prices will rise in and around Phoenix, with single-family rental properties and apartment complexes accounting for much of the growth. 

Fortunately, interest rates are reasonable and home prices aren’t anticipated to exceed local incomes, so it’s also a stable market to buy into right now.

Wherever you wind up, choose somewhere that has steadily appreciated over the past few years and is predicted to continue into the future, as this will boost the value of your investment.

Know Your Tax Benefits

A number of initiatives and tax breaks can help you make the most out of your property investment — you just have to know what they are.

If your second home is for personal use only, you may be able to deduct mortgage interest on the second property. The amount you can deduct will depend on the combined mortgages of your first and second home. 

You may also be able to deduct real estate taxes, property taxes, and the interest on a home equity line of credit you use for improvements to your second property.

If you plan to rent out your second home, there are a variety of potential tax deductions available to you, organized into three levels. First, if you rent out your home for fewer than 14 days per year, you can enjoy tax-free income on that rental property.

If you rent out your home for more than 14 days, but you also use it for more than 14 days yourself, you qualify for the second level of tax breaks. That means, while you’ll still pay tax on the rental income, you’ll qualify for partial deductions on costs associated with renting out the house, from repairs and utilities to association fees.

Finally, if you rent out your property for more than 14 days per year and use it for fewer than 14 days per year yourself, you’ll pay tax on the rental income, but all of the costs associated with renting the property will be deductible.

Sell Smart

1031 Exchange

One way people maximize the investment potential of their second home is by using a 1031 tax-deferred exchange when they sell their house. If you’ve only been using the property as a rental, this is an excellent route to take, as the house does not qualify as a personal-use property.

The 1031 exchange essentially involves reinvesting any profit from your property into buying a replacement property in quick succession to selling. This allows you to defer any taxes on that property. It can be tricky to understand, so it’s vital to consult a real estate professional who is familiar with the process.

Capital Gains

While a 1031 exchange can be useful if you’ve been renting out your property, there are also benefits to living in your second home when it comes to selling it later on.

If you live in your second home for two out of the five years immediately before selling it, the property is considered your primary residence, and you can exclude up to $250,000 in capital gains as a single person, or $500,000 if you file as a couple. 

Even if you didn’t live there for a full two years out of the past five, you can still qualify for partial exclusion based on a ratio of how much of the time you spent there.

Maximizing the investment potential of your second home can involve a lot of work, research, and a steep learning curve; but by familiarizing yourself with the market, the area, and the law you can make a huge difference to your return.

Contributed by: Aderra Condominiums' sales are headed by Melanie Sanders of RE/MAX Platinum Living. Melanie comes with 25 years of experience as an Associate Broker/Team Leader, specializing in New Homes and Model Home Sales. Melanie was the former Vice President and Designated Broker of DR Horton and Ryland Homes, running sales and marketing. Melanie and her team have the knowledge, experience and friendly attitude required to manage all aspects of sales at Aderra.

All You Ever Wanted to Know About Tax Benefits On Personal Loans

Personal Loans are becoming convenient means of getting emergency funds for various purposes. They are easy to get, and you don't have to declare the purpose for which you are using the loan. Did you know that Personal Loans can also in certain situations, provide you Tax Benefits?

Personal Loans

Personal loans are unsecured loans. You don't have to provide a collateral for getting the funds. As they are unsecured, they come at high interest rates. However, because they do not require any security, there are fewer documents to verify, so these loans are processed quickly.

While you can get personal loans even with a low credit rating, the interest charged can be very high. If your credit score is good, you have a better chance of getting the loan quickly and at lower interest rates. 




With Personal Loans, you don’t need to declare the end use and show proofs as you have to do with a Home Loan or Car Loan. You can use the funds raised for any purpose. You can use it for an emergency expense, for medical or hospital bills, for educational funds, for buying new furniture, to buy home appliances, to raise quick funds for your business and so on.

As long as you stick to the repayment schedule, and don't get too many personal loans at once, you can probably repay the loan on time and be relieved of an expensive debt. However, unlike a Home Loan, you don't normally get tax benefits on a personal loan.

Or do you?

Tax Benefits on Personal Loans?

With a Home Loan, you get tax deductions on the principal repayment and on the interest paid on the loan. So, you generally get a Home Loan to buy a house or to carry out repairs and renovations. As they are secured loans (the property you buy is the collateral), the interest charges are much less compared to Personal Loans.

So, why would you get a Personal Loan to buy a house? Normally you wouldn't. But there might be exceptions. For instance, you generally get only around 80% of the total cost of the house as a Home Loan. You would have to pay the rest yourself as down payment.

You may not have access to enough funds for this down payment. But you need to make the payment quickly to get your Home Loan processed and to buy the property. You may be thinking of renovating or redecorating your house. A good option might be a Top-up loan on your Home Loan, but you currently may not have made enough repayments to have the necessary equity on your home for a top-up loan.

In these and other cases, you may resort to a personal loan if you are confident of keeping up with the repayments on your Home Loan and Personal Loan.

Tax Benefits on Personal Loan Used for Residential Property

If you use your personal loan funds towards acquisition of a house or to renew or remodel it, you can show proofs of the expenses to avail tax exemption on the interest paid on the loan. According to Section 24(b) of the Income Tax Act, use of borrowed capital towards purchase, renovation or repairs on your residential property entitles you to tax deductions on the interest of the repayment.

Section 24(b) does not specifically mention the type of loan. So, even if you take a Personal Loan to bridge the gap between the Home Loan and the actual cost of the house, or to repair the house, you can claim a tax exemption on the interest amount paid. Note that you cannot claim deductions on the principal, only the interest component.

If the loan has been taken for a house that you live in, you can claim a deduction of up to Rs. 1.5 Lakhs on the interest amount paid in that year. If the house is still under construction, then you will have to wait until the construction is completed. If you have let the house you borrowed the amount for on rent, there is no cap on the interest amount you can claim deduction on.

Remember, if you are carrying out repairs or renovations, save all the bills for materials and labor. You need to show these as proofs to get the tax benefits on personal loan.

Tax Benefits on Personal Loan Used for Your Business

Funds you use for business purposes can be deducted from your net profit as expenditure. So, any funds raised through a Personal Loan that you have used as business expense can also help you save on taxes. The expenditure brings down the taxable profit, so your tax liability becomes less.

While you don't generally associate Personal Loans with Tax Benefits, depending on how you have used the funds, you can claim deductions and save on taxes.

How To Clean Up a Low CIBIL Score

CIBIL or Credit Information Bureau (India) Limited is India’s foremost credit bureau. Financial institutions send monthly records of everyone’s credit repayments to CIBIL. Based on these records, CIBIL prepares a Credit Information Report (CIR). It also assigns a credit score to every individual.

This credit score (or CIBIL score) is vital. It shows the individual’s creditworthiness. Creditworthiness is an individual’s ability and willingness to repay outstanding debt. 

A good credit score is a key to getting further credit from financial institutions. This could be in the form of loans or credit cards, for example. A good CIBIL score ranges from 750 to 900.

What if you have a low CIBIL score?

A low CIBIL score is one that ranges from 350 to 550. Such a score can have negative financial consequences for you. Here is a quick sampling of what you can expect:

• Rejection of loan and credit card applications: A low CIBIL score shows poor repayment ability. It may also show that you have heavy outstanding debt. So, financial institutions may reject your credit applications. 
• Higher interest rates on loans and credit cards: Financial institutions may accept your loan or credit card applications. But there may be a caveat—they will charge you higher interest rates. Lenders do this to protect themselves. A borrower with a low CIBIL score poses an inherent financial risk to them.
• Rejection of employment applications: Some employers run a background check on the financial history of potential employees. A low CIBIL score will ring a warning bell to those companies. You could lose a plum position as a result.

Improving a low CIBIL score

A low CIBIL score does not have to be a permanent problem. There are ways to clean up your score. Here are some tips to help:

• Check your credit report: Go through your credit report to ensure there are no mistakes. Check your credit report every six months. If there are any faulty entries, approach your lender or CIBIL to correct them.
• Pay your bills on time: This one seems simple but everyone misses a bill payment from time to time. Set up reminders to help you with this.
• The debt correction method: Do you have multiple debts to pay? Maybe you have more than one loan and some credit card debt. Here is a way to simplify your debt repayment process:

1. List out all your outstanding debt. Arrange the debts in order of most expensive to least expensive. 
2. Pay off the highest debt first. Cut corners if you must. Just focus on getting rid of your most costly debt.
3. Pay off the next highest debt. Do this once you have repaid the highest debt on your list. Then move on to the next highest debt. Continue doing this until you clear all your outstanding debt.

• Avoid applying for loans: Do not take any loans until you clear most of your current debt. A lender might reject your loan application if your loan burden is high. Such a rejection will have a further negative impact on your CIBIL score.
• Avoid taking new credit cards: Do not accept a new credit card until you clear your debts. Multiple credit cards can be an indicator of a high debt burden. 
• Pay the minimum amount due on your credit cards: Even while you tackle the rest of your debt, continue to make your credit card payments. Do not neglect this. If possible, pay off more than the minimum amount. 
• Reduce your dependency on credit cards: This is one way to maintain your financial independence and reduce debt. Try to stop using your credit cards for a few months. Remember, credit cards charge very high interest. This will only add to your financial burden. 
• Do not cancel old credit cards: Cancelling old credit cards might seem like a way to improve your CIBIL score. But this is not the case. Rather than cancel old credit cards, aim to use them infrequently.

Conclusion

Cleaning up a low CIBIL score will not happen overnight. It takes time, patience, and financial planning. This is why experts recommend that you improve your CIBIL before applying for a personal loan. 

There are so many easy ways available to Improve your CIBIL Score and Once you improve your CIBIL score, work on maintaining it. You can do this by following the best financial practices.

Are You Self-Employed and Eligible for R&D Credits?

Self-employed? Work from home? Do research and development work? you might think that only certain individuals or type of research qualifies. But, you’ll be surprised to learn that if you are self-employed and work from home, you may qualify for R&D credits. 

And, you will find that there are many freelancers and small business owners, who qualify and don’t even know they qualify for the funding to help them push their product/service, and research along.

Qualifying Research 

Regardless of the size of your business, even if you are an individual doing freelance work, as long as you are doing “qualifying” research, you may qualify for R&D tax credits as a UK business owner. 



Some research which constitutes as “qualifying” includes: science advancements, trying to overcome uncertainties, or work which couldn’t be done easily in the field, are types of work which may allow you to receive funding.

Must Advance It

The project you are working on must show you are trying to make an advance in the field. You should be researching something which has uncertainty in the field. 

You should be doing work which is advancing a scientific or technological aspect in the field. And, you must prove that the work you are doing is trying to fix/deal with the uncertainty in that field.

Overcoming It 

In order to qualify for funding, you must show/prove how you tried to overcome the uncertainty. The type of research you did, the work you did, how you modified your project in order to create an advancement in the field. 

The more you can show, and the more methods you can show you attempted, the greater the possibility that you will receive funding, and the more you are likely to receive when you apply for funding.

It is also important to show another professional in the field couldn’t work out the solution you were able to work out. Basically, you have to prove your advancement is one nobody else came up with, and one which is truly going to advance and help others moving forward.

Even if you are a small business owner, or mid-sized business owner, you might qualify for R&D tax credits, which are tax-deductible. If you would like to look in to whether you are eligible for R&D credits then randdclaims.co.uk could help you. 

Whether you are looking for an advance, are working to recreate something, or are making leaps and bounds in technological/scientific research, it is highly likely you’ll qualify. These are a few of the basics to know when applying for R&D tax credits.

How to Save Money on Heating Costs during the Cold Winter Months

 It just seems that the weather becomes worse with every winter we experience. The extreme cold temperatures, wild snowstorms, and damaging winds can really affect the size of our heating bills. If you’re looking for ways to save money on heating costs, you’ve come to the right place.

Dress Warm While Inside

You may be tempted to increase the heat in your home by turning up your thermostat. This will heat up your home to a pleasant tropical climate, but it will also drain essential money from your checking account once the bill arrives. 

Instead of turning up your thermostat, opt to dress in warmer clothes while you’re milling around in your home. Purchase some cute fuzzy socks, a comfortable hoodie, and thick pajama pants or sweat pants. This is an affordable way to keep yourself warm and your heating bill down.

Winterize Your Home

Sometimes, your home becomes cold despite your furnace’s best efforts because cold drafts are finding their way into your homes to turn it into an ice box. This can be fixed with a quick trip to a local home improvement store to purchase a window insulator kit. 

These insulator kits usually come with a roll of plastic, double-sided tape, and instructions. This kit is designed to prevent cold air from getting into your home through openings around your windows and doors once properly installed.

Free Solar Heating

The sun is one of the most powerful forces in our universe. It provides life-giving warmth, light, and comfort. During the darkest time of the year when sunlight is scarce, don’t hesitate to take advantage of the heat it provides. 

If you have windows that face east while the sun is rising, open the curtains to let in the warm rays. They will warm your home for free. Once the sun begins to set, close your curtains to trap the heat and enjoy a warmer home at no cost to you.

Proper Furnace Maintenance

Keeping your furnace working at optimal levels is essential to ensuring a low heating bill. Furnaces are like any other piece of machinery. They need regular maintenance to ensure they function at peak performance. 

Be sure to schedule an appointment with a professional HVAC contractor to inspect your furnace and perform any repairs that might be required. You should also consider replacing your furnace filters. 

A dirty filter can cause your furnace to work harder to send heat through your home. Aim at replacing the filter once a month to keep your furnace costs down.

As an added tip to save money on your heating bill, try turning down the thermostat during the day. Once night falls and the temperature drops, turn your thermostat back up to a comfortable temperature. You can survive the day with a bit of a chilly house in order to have a warm house during the cold night.

Reduce your Home Makeover Bill by 30% Using the Newly Launched Zoutons Coupon App

The Delhi based coupon aggregation website, Zoutons, is all set to launch its Android app for the convenience of its users. This introduction of the mobile app is going to storm the market as it is aiming to make the online shopping a much more affordable yet efficient task. Keeping the concept intact, the website focuses on representing several coupons and offers compiled together on a single platform.

Aim and Vision

Launched in 2013, this coupon website was started by Mr. Sahil Chalana. Currently it is dealing with around 175 leading online stores where it has segregated coupons and offers from top 75 (approx.) categories. 

The users can easily find sale-oriented offers, bank offers, wallet offers and a lot more to choose from differentiated sections like clothing, accessories, mobiles, electronics etc.

The website has managed to compile around 500 online pan-India brands and approximately 45 banks under one roof. The launch of mobile application is going to help the users access distinct offers, be it on clothing or home décor items or anything else; from best online stores. 




Two things make Zoutons stand tall in the online market- customer satisfaction and betterment of shopping. Across the internet, coupon websites like Zoutons have laid down the embodiment of saviours as the mutual focus is implied on offering best discounts & cashbacks on each and every category or section. 

According to the sources, 100k+ app installations are kept as a target to enhance the website traffic. Herein, one can explore schemes, deals and coupons on most preferred online stores like Amazon, Bookmyshow, Paytm, Flipkart, Shopclues, Pharmeasy, Makemytrip and a lot more in order to save to a greater extent on services like recharges, ticket booking etc.

How Zoutons helps you reduce your home décor items bill by 30%?

There are more than 50 offers under each store and category, bifurcated for both new and existing users. This facilitates the access to explore the clothing category for coupons rendering more than 70% discounts or make orders of your home decor with upto 30% cashbacks instantly. 

Extracted deals, coupons & offers from leading stores like Amazon, Flipkart, Myntra, etc. providing 30% discounts or maximum cashbacks of Rs.350/- are collectively listed subject to be availed with just a few clicks.

Forget about rushing towards the laptop or opening your browser every time you want to explore the ongoing offers and coupons because this app is going to flush down your unnecessary actions. 

Zoutons android app is a user friendly mobile app which can be downloaded from the Google Playstore and Apple Appstore for free. It is embedded with a completely minimalized UI with personalised listing of offers from all the popular stores.

Apart from this, there are special services that ponders more and more installations. Foremost feature of the application is that it takes up very less space in the device. The size of the application in only 2.7MB, minimising any kind of storage hinderances. 

One can personalise the display of coupons & offers as it gets organized according to the user preferences. Moreover, the news feed on the home page gets updated with the change in the search history, making the scrolling and selecting easy. 

Also, the in-built Night Mode of the app ensures that the user is able to access each and every section without any kind of stress on the eyes. 

Zoutons Android App

With the app, users can stay updated about all the latest deals, sales and offers across the leading online stores. The app notifications require to be enabled which regulates timely updates. 

This, consequently, ensures that no offer, sale goes unnoticed. Besides this, Zoutons newsletter is another plus point in keeping the users aware about ongoing and upcoming sales and deals. Every user can subscribe to the newsletter and become a member for instant mails & pings auto-generated for all users.

The Zoutons app is a free android application which can be downloaded from the playstore and takes just 2.7MB space in Internal storage of the device. With the recent rise in digital services and online marketing, this can be a highly benefiting step for the team in making a stronger mark on e-commerce platform. 

As per their tagline, “The Loot is On”, the app makes sure that each and every user gets benefitted with the literal LOOT with remarkable offers.