Investing in a land or apartment has its own pros and cons. You must understand the advantages and disadvantages of both in order to reach the final decision.
Investing in a property can be highly tricky. A consumer faces several dilemmas, especially when there are multiple offers and schemes flooded in the market. Selecting between land and apartment is also one of the biggest predicaments faced by a number of property buyers. Of course both have their own pros and cons. Therefore, this call should be taken after assessing both the options and figuring out one’s own requirements based on individual financial portfolios and objectives of buying a property.
The first question one should ask themselves is whether the property is for investment or for self-use. A lot of first-time home-buyers assume that buying a house is always a better venture as they have more accommodation. Here, the question arises, ‘Should I invest in a unit or a house?’ and, ‘What type of property will deliver better return on investments in the long run?’
For urban consumers in a city like Mumbai, owning a piece of land is not an option. However, outside the metro cities, this is one of the luxuries consumers enjoy. The biggest advantage of developing your own land instead of moving into an apartment is the liberty of shaping it the way you always dreamt of. At the same time, it gives the buyer the control over the cost as well as the quality of the material used in building. On the other hand, buying a ready to move property means less hassle and time investment in getting it ready for occupying.
With space accessibility disappearing rapidly in the country, value of the land is estimated to appreciate very quickly, especially in cities. Flexibility of options to build as per future requirements helps the cost of land and property increase very fast. However, an apartment has a partial life span, so its value has a weakening outcome. After a certain amount of time, there is immobility in the development. Lack of flexibility in use, modification and expansion are hindrances to a quicker growth compared to that of land. There are just a few good benefits to buying an apartment such as security, convenience and the site gains.
A bank loan while purchasing a home or land is almost always necessary. It should be understood that while it is quite easy to get a loan for an apartment, it is rather difficult to get one for a plot, as banks usually do not provide finances for land.
While land generates a relatively very low income if rented, apartments are generate handsome rental returns from the very first day of taking the possession. It is sometimes difficult to reoccupy the land if the tenant pushes the property into litigation, however, in case of apartments, laws are well in place to avoid litigations.
There are quite a few more reasons for investing in an apartment. One of them is you do not get any tax benefits on the repayment of a housing loan for a vacant plot. Also, the sale profits of a vacant plot attract a higher tax. On the other hand, many people find the prospects of building a house too overwhelming. Maybe because of the running around for approvals, finding an architect, getting a contractor and overseeing the construction, but the benefit of undertaking these difficulties and struggles are that they can build a house of their dreams and customize it to their perceptions and necessities. If you are a senior citizen, then it is advisable that you choose a flat over land to avoid the hassle of maintaining and developing the plot.
Author's note: The author completed his MBA in Finance and Marketing in 2012 and founded the the Geopreneur Group at the young age of 24. He won the "Young Achiever Award" and the "Emerging Developer of the Year - Residential" at National Awards for Excellence in Real Estate & Infrastructure 2015.
Disclaimer: The views expressed in the article are solely of the author and may not represent 99acres.com's opinions on the subject. 99acres.com does not take responsibility for any actions taken based on the information shared by the author.