The concept of a ‘holiday’ in India is undergoing an alteration and has come to a stage of maturity. This has come about due to a number of factors which include a stressful work life and therefore a need for regular short breaks, rising income levels and higher aspirations for a better lifestyle etc. The holiday bug has caught the fancy of Indians in a big way, but with a difference. If we took a peek into the past, a few years ago investing in a holiday home was the privilege enjoyed by a few HNIs or NRIs. Since then, there has been a perceptible shift, post Covid 19, where we are seeing younger generation of Indians looking at purchasing property in holiday destinations across the country.

In recent times, we are witness to a perceptible trend, wherein people on a vacation are not staying in an expensive hotel but prefer to stay in a resort home. Resort homes offer all the luxurious amenities and services that a hotel provides; but with a homely environment. This experience of a resort home has changed the entire dynamics of the business. People are now not just staying, but are investing in such resort homes; a change of position from visitors to now being owners of such properties. This not only provides them with free holidays during the year, but also guarantees them regular monthly income and price appreciation of their asset, in the years ahead.

The resort home concept has caught the fancy of people from Mumbai due to its close proximity to local tourist destinations like Alibaug, Karjat and Lonavala. For instance, resort homes in Alibaug are fast gaining traction among investors and home buyers alike for its propensity to develop as a growing asset class, going forward.

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According to a research report by 360 Realtors, second homes or holiday homes in India have become immensely popular after the pandemic. The aggregate size of holiday homes by the end of 2021 amounted to US$1.394 billion. This is a jump of 88.63 per cent compared to pre-COVID times in 2019. This is due to the fact that people want to get away from the hectic pace of city life. The concept of work-from-anywhere is also fueling this demand within the property market for resort home investments.

Traditional investment options like Bank FD, Gold, Mutual Funds etc., are passé and will get an investor only a certain amount of return. Resort home investment allows the investor the flexibility of getting attractive returns on a regular basis, depending upon the location of the property. If the property is located at a well known holiday destination that has a larger footprint of tourists all year round, then the returns for the investor will be even better. In addition, the investor will get to enjoy free holidays during the year; akin to being on a perpetual holiday with the family.

There are multiple benefits to investing in resort homes. Primarily, these investments offer you regular income throughout the year, without any maintenance cost. Secondly, these types of investments provide tax advantages such as depreciation deductions and ability to write off expenses. Finally, they offer you with another option of investment that is not directly tied to the stock market.

Resort home investments are highly rewarding as investors can expect a return in the range from 8% to 9% and up to 20% annually. The returns will heavily depend upon the location, property management, target audience and branding. The right combination can lead to consistent and robust returns.

The tourism sector in India has got a major boost due to a number of large infrastructure projects that have been completed or are on the verge of completion. This has improved connectivity resulting in people not hesitating to enjoy a holiday or even invest in a resort home of their liking, as they can now travel to and fro with greater ease; but most importantly, has now drastically reduced the travel time.

The business of Resort homes is flourishing due to a growing demand for hospitality assets versus shortfall in the supply. This demand-supply mismatch has created a favorable climate for investments into the resort home segment. A vacationer looks at experiences that he can cherish and take with him back to the city. They also look at themed resorts that resonate with international and famous exotic beach resorts.

Finally, we can conclude by saying that the decision to invest in a resort home is a combination of many factors; financial being one of them. It helps you to fulfill your aspirations of living a lifestyle of finesse, creates and multiples your wealth and ultimately allows you to cherish memories for a lifetime.

(By Dr. Sachin Chopda, Managing Director, Pushpam Group. Views are personal)