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Plot vs. Flat – Which One Is Better? What an Investor Must Know

Architecture   Mar 19, 2020

Explore the elements which influence factors such as pricing, risk, and appreciation before you step into the market.

When property buyers start looking for a home, they are often faced with this common predicament – should I buy a readymade flat, or invest in a plot? Both of them come with their own sets of undeniable benefits and can be hard to pick from. Should you purchase are ready-to-move-in flat, or should you invest in a piece of land from the best plots for sale in Bangalore? Well, while the final decision may still rest on personal factors, such as the availability, your budget, your preferences, and the likes; there are a few objective factors which you can keep in mind to help make this decision easier.

If you are looking to make a property purchase for living, it is highly recommended that you focus primarily on your personal preferences, however, if you are looking to purchase a property as an investment, here are some things you should definitely keep in mind before you make that final call.

Effort: This has to be one of the most important points to consider when deciding which of the two is a better investment. If one decides to buy from the best plots for sale in Bangalore, it will inevitably be followed by additional efforts made towards the construction and litigations. Whereas, if you decide to buy a flat, the developer offers you complete possession of the flat after all the work is done. From this perspective, purchasing a flat would seem like a better choice of the two.

Value Appreciation : As an investor, the best choice for an investment would be one which can offer an early and fruitful return on your primary investment, and both plot and flat experience appreciation due to varying factors and at varying rates. For example, since cities are facing inflation when it comes to space, and good residential spaces become harder to find, the  value of a piece of plot increases a lot more rapidly than that of a flat, which experiences stagnation after a point in its lifecycle due to the inability to expand or modify by much.

Risks: Purchasing any kind of property bears its own risks, and knowing the difference between them can help the buyer pick one which could hold a lower personal risk. Risks one has to cover while purchasing a flat mostly include legal work and appropriate papers; whereas, while purchasing a flat one is subjected to delayed delivery or compromise in quality by the developer.

Banking: It should come as no surprise, but funding for purchasing a flat carry a lot more perks than the funding one may find for land / plot purchases. Banks, in general, offer a maximum of 80% of value under loans. This reduces further to a mere 50% if the land is a resale property. Whereas, for a flat, this goes up to 80-85%. Flats also have a longer loan tenure period (30 years) than plots (15 years).

In conclusion, when looking for a good investment option, the choice between plot and flat really comes down the kind of investment one intends it to be, and how much of a personal risk it carries. And yes, while personal preferences do matter, the final call for buying a property, especially one intended to serve as an investment should depend greatly on the market factors such as those mentioned above. While it would be simpler to purchase a flat and lease it, it limits your ability as an investor to experiment; and while purchasing from amongst the best plots for sale in Bangalore seems tempting, it might pose a higher risk in the near future.