We are Wealth Clinic Team
So, you have decided to have a home of your own after spending years in rented accommodation. Welcome! You are going to have a great piece of real estate that will offer you both financial and emotional rewards.
So is it a flat you are looking for? Or do you fancy building your dream adobe from the ground up by buying a plot? A million-dollar question, or should I say dilemma, right?
Well, both have their merits and demerits. And the decision to purchase a flat or a plot depends on your lifestyle, needs, preferences, and how are you going to fund it.
Here are 8 pointers to help you decide what works best for you!
Ready to move in VS build from the scratch
Buy flat/apartment/builders floor/readymade residential structure if you can’t wait to live in a house of your own. Plots require time, energy, and money to be built up into the place of residence you desire.
A plot requires effort – a whole lot more efforts
A plot is a mere piece of land. And it requires a whole lot of effort to put up a liveable structure on it. From hiring the architect, designing the layout, and getting it approved by the local authority to hiring a contractor, arranging construction materials, and supervising the construction, there are just so many physical and mental efforts needed.
On the other hand, you can just move in with your family in a flat or apartment as it is ready to move space. Construction is complete with all required utility connections fitted in. And all you have to worry about is to mould the interior to your taste. Moreover, a flat or apartment also comes with added amenities like a clubhouse, gym, sports court, amphitheatre, etc.; and round-the-clock services like power back-up, security, plumbing, electrical, and so on.
Needless to say, you can’t enjoy amenities, security, and other added services in case of a home built over a personal plot.
Plots appreciate faster than flats
As Mark Twain once said “Buy land, they don’t make it anymore”
There is only so much land – or plots – in the market whereas one can build multiple flats on a single plot. And this supply crunch makes the plots appreciate faster than flats.
Real estate appreciation depends on the location of the property and how close it is to big infrastructure projects. And the closer your plot is to a premium and desirable location, the more value it will fetch.
Flats, on the contrary, depreciate with time as it’s an aging property with a lot of wear and tear.
So if you are looking for higher ROI or appreciation, opt for a plot rather than a flat.
Plots offer long-term investment and usage flexibility
Buying a plot can be a long-term investment as its value can rise exponentially in the future. Moreover, you have the flexibility to use it for residence or commercial purposes (with legal permission not tough to attain).
A flat is almost always used for residential purposes and is not a long-term investment due to value depreciation over time.
Looking for rental income, go for flats:
Flats generate higher rental incomes than plots as they have a whole lot more amenities and services to offer. Houses built on plots usually generate low rental income for similar living spaces. The catch, however, is that you can build up the plot into several-storey residence and easily overtake the income generated from flats. But that obviously requires a lot of investment, to begin with. Moreover, independent plots can also attract litigations putting your rental dreams into disarray.
So as a general rule – go for flats for regular rental income. Better the Location, surrounding infrastructure, and quality of the neighbourhood – the higher the rental income.
A Plot offers more flexibility to modify and expand the living space than a flat
You get limited space to call your own in a flat and so the extent to which you can modify is very limited. On the contrary, you can convert a 2 BHK one-storey modest home into a 4-storey luxury villa if the plot is big enough and the pocket is deep enough.
Plots are ready for possession – always!
You can own the plot in a matter of days while a flat takes time to be ready for possession. Unlike flats, you are not dependent on the developer to finish the construction and can do it at a pace you like. I have seen homes getting constructed in as quickly as a couple of months. Whereas the apartment may take months or years to come into your possession.
It’s easier to get loans for flats: raising funds for plots is a tad tougher
It’s a lot easier to get funding (read home loans) for flats rather than plots. Plots have to be registered under the local authority to get the loan. You can forget the loan otherwise. Even when the loan is sanctioned, the maximum loan tenure you get is 15 years – half the tenure of a home loan for flats which is 30 years. That means the EMI will be high and interest will be steep.
Moreover, there is an age restriction to put you in a bind. The older you are, the tougher it is to get a home loan on plots.
Be it plots or flats, both are great real estate investments. Choose whatever floats your boat. And irrespective of what you opt for, reach out to Wealth Clinic to get the best real estate deals in Delhi, Noida, Gurgaon, and other cities across India. We are available at wealth-clinic.com and 8929822005.
Comments