Investing in second homes in India is no longer just about luxury. Today, it is also about making a smart financial choice.
The second-home market is valued at around USD 3.2 billion and is growing at a rate of nearly 22–23 percent every year. Many buyers see these properties as a way to enjoy nature while earning steady income. A recent survey found that 54 percent of high-net-worth individuals (HNIs) are keen to buy or upgrade their second home.
When people invest in a second property, one of the first questions is about returns. Second home returns in India are becoming more attractive as tourism grows. Rental yields in some regions, like Himachal Pradesh, range from 3 percent to 6 percent, while hotspots like Sindhudurg in the Konkan belt deliver up to 7.2 percent rental yield—among the highest in the country.
In fact, fractional ownership models of vacation homes India often deliver gross rental yields of 6–8 percent, with appreciation of 9–12 percent annually, giving an overall return (IRR) of about 16–18 percent. A ROI vacation home can therefore become both a reliable income source and a wealth-building asset.
This shows that with active involvement, a rental income from a second home can cover costs and generate real profit.
“With improved infrastructure and rising tourism, second homes are no longer idle assets; they are becoming income-generating avenues for urban buyers,” says Ramesh Nair, CEO of Colliers India.
Companies such as Isprava, Lohono Stays, and Elite Havens are helping investors unlock these returns. Isprava, for example, builds and manages luxury villas in Goa and the Nilgiris, while Lohono Stays specializes in premium rentals, ensuring steady yield for owners.
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