WHICH ONE IS BENIFICIAL FLAT OR PLOT

Whether you are a first-timer or a returning home buyer, you typically face a dilemma while picking a plot or flat When it comes to property investment most people are confused about the better of the two investment options. Typically, first-time owners prefer to purchase a flat, but when it comes to investing in a second property they are conflicted whether to buy a plot of land and build a villa or bungalow on it or invest in another flat. There are several advantages as well as drawbacks of both of these property investment types. Here’s the comparision between flat and plot ;

           

PROPERTY VALUE

This is major  factor to consider when you decide to make an investment in plot or flat. Flats generally have a limited life span, which is why its value diminishes over time. While the value may appreciate in the first few years, its growth becomes stagnant as the building becomes older, requiring reconstruction or re modification. The value also comes down  since you cannot modify or expand flats with time. On the other hand, it is becoming increasingly difficult to find land space, especially in bigger cities, which is why the value of plots is expected to appreciate rapidly.

For instance, the under-construction Dwarka Expressway, which aims to improve connectivity from Gurgaon to the NCR region, has increased the value for Gurgaon’s property market. Similarly, localities surrounding the Mumbai metro projects witnessed triple-digit price appreciation within six years.

INCOME

while time can not affect plot but flat can become old with time. A readymade house can start fetching rental income immediately after you invest in it.  However, a plot will generate no rental income until you construct a house on it. But if you build an apartment on your land and sell the individual units, it will deliver handsome returns in the long run.

CONSTRUCTION

The construction of flats is typically managed by real estate companies and their builders and the buyer simply has to move into a pre-constructed flat upon receiving possession of the house. However, when you buy a readymade flat, you have little to no say in the construction. You cannot really change the shape and size of the flat and have to follow the master plan as designed by your builder. On the other hand, if you purchase a plot of land to construct a house on it, you can design the house as you please. You can hire Labour on your own and oversee the construction too. You also do not have to worry about delays in construction or possession in case of plots.

FINANCE

If you are purchasing a flat, home finance will easily cover your expenses. However, it can only be used to buy a built-up or under construction home.

While if you are looking to own a vacant piece of land, you can opt for a plot loan. This loan can only finance a plot purchased for residential use.

THE RISK FACTOR

With regards to flats, one of the most common issues is that the developer may compromise the quality of construction in order to control costs and meet deadlines so that they can avoid penalties related to delayed possession as per RERA guidelines. If you are constructing the property on your own, you can control the quality of raw material but there is the risk that the land you purchase may go under litigation, which can affect your investment rather badly.

CONCLUSION

As you can see, there is no right answer to the question plot or flat which is a better investment. Both have their own set of advantages and drawbacks. Therefore, the buyer must make a choice based on his/her requirement when investing in real estate.

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