One of the greatest purchases you’ll ever make is a home. However, it requires a sustained outlay of resources. Whether it’s your first time buying a home or you’re a seasoned pro, you’ll likely run into confusion when deciding whether to buy a plot of land or a flat.
Before making a decision, it is important to weigh the pros and cons, considering aspects like the accessibility of funding, the potential for large returns, tax advantages, etc. This article provides a more in-depth look at the advantages and disadvantages of these two types of property investments.
Below is a discussion of the main factors that might help you to make an informed decision:
Value enhancement: Flats and land, in general, will both increase in value over time. There will be more people in the neighbourhood and higher demand for your property as a result of the addition of any form of transportation infrastructure, be it a metro line or a road.
In general, the value of flats rises over time as rising rental yields cause their market price to grow. The value of plots tends to rise due to limited supply, and rapid infrastructure development—especially in larger cities—also causes increases in land prices.
Returns: How do earnings change between a plot and a flat? It is possible to earn rental revenue from a ready-made home immediately after purchasing it. But until you build a house on the land, you won’t see any rental money.
However, if you construct an apartment building on your site and sell the flats separately, you can expect to see substantial profits over time.
Modification: A piece of land does not degrade with age, but a flat may. As a result of normal wear and use, it’s not uncommon for homes to need some sort of repair work, such as a renovation or even a complete rebuild.
A flat cannot have its size increased or its layout altered in the future. Plots, on the other hand, provide more options for the type of building that may be constructed on them, whether it be a home or a commercial establishment.
Taxation: Those who use a house loan to purchase a flat are eligible for a tax break of up to Rs. 1.5 lakhs on the principal amount they pay. On top of that, you can write off interest payments of up to Rs. 2 lakhs. Deducting interest paid on a plot of land is only possible once the building has been finished.
Which one is better?
Both plots and flats have their benefits and drawbacks, so it’s important to weigh them both before making a decision. Invest in a piece of land in a desirable area if you have limited cash for investment. You should expect a big return on your investment because they appreciate at a higher rate than flats.
With plots, you get higher flexibility to build a structure of your own choices and preferences. Hence, plots offer more autonomy.
Moreover, in contrast to flats, where ownership may not be obtained for months or even years, the land is typically ready for possession. Your plot will likely be ready for possession before a flat if it is located in a township.