Plot vs flat which is the better investment Option? Investing money into property is not an easy task. There are many factors that need to be taken into consideration before arriving at a conclusion of which real estate investment suits you the best. There is the age-old debate of real estate investors on where to put their money – land or constructed buildings. The decision of buying an apartment or a plot is based on several factors – budget, immediate need, taxation and lifestyle preferences.
Here are a few arguments to consider before you choose to invest into a plot vs flat.
Possession time
Generally, apartments take years to complete and from the time of purchase to the time of delivery, the time in between can range from months to years. Plots are immediate possession. Plots sold in township developments are done at a stage where all the associated amenities are completed, and the buyer can immediate begin his work on the plot without any delay.
Investment Appreciation
Plots are known to appreciate at a faster rate than apartments. There is not depreciation in plot value over time. In case of an apartment, the age of the apartment will affect the final value of the property. During stable market conditions, plot appreciate faster than apartments. Plots are a good long-term investment to make.
Earning Income
If earning a regular income is your motive, then you need to go with apartments. There is no income from plots unless you construct on them and that is an added investment. Apartments come in a ready format to earn a living. An apartment bought in a good location can be a profitable investment.
Funding
It is easier to fund an apartment purchase than a plot purchase as most banks and financial institution do not fund plot purchase. For an apartment, banks fund up to 85% of the property value. In the case of plots, if they are approved by the local corporation, you can expect a funding of about 50% of the value.
Tax benefits
An apartment has a clear Rs 1.5 lakh tax deduction on a home loan taken for the purchase of the property. There is only a rebate in taxation on the construction that will be undertaken on the plot and not the plot purchase itself. This makes apartment investment more attractive if you are looking for a tax benefit.
Profile of Investor
If the investor wishes to hold the property for a long period without the hassle of maintenance, then a plot purchase makes more sense. If the investor wants to resell the property in a short period of time and make profits, then then right investment would be an apartment. Senior citizens who want to invest their savings are better placed to opt for plots if they already have a home as they are less maintenance.
A plot vs flat will depend on the purpose of your investment. Long term investments are the best in plots while regular income-generating investments are best with apartments. The buyers need will play the most critical role in deciding which works better.
