Plot Vs Flat: Which is a better investment option?

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Investors who invest in properties at a certain point of time might get confused and may ask if is good to invest in a plot or a flat. While the trend of buying or investing in flats is catching up in major cities of India, still there are some people who are investing in a plot.

Most of us buy a plot either for building a house as per our requirements or for investment purposes. On the other hand, a flat is a redesigned, multi-floored construction. You cannot change the flat’s shape and size of the construction area. However, it is beneficial in matters related to security, accessibility, and location.

As you can see, both the investments have certain merits and demerits, but if you compare it with the below points, you can make a better investment decision.

Cost

The cost of buying a plot or flat depends on the location, size, space, design, etc. but the cost of plots rises exponentially as compared to flat. This is due to a lack of space, especially in cities.

Flexibility

A plot is highly flexible, and it can be used for various purposes like building a house, commercial space, etc. Such flexibility is not available in a flat because you cannot expand the flat layout or modify it extensively.

Loan availability

Banks provide loans for buying a plot because it tends to be a little risky compared to a flat. Plots are usually prone to get stuck in litigations, which are very difficult to come out from, and banks would like to avoid such problems.

But the bank will readily finance you for buying a flat after checking the flat papers, physical verifications, etc. through a home loan.

Regular income

While the plot generates very low income and, if rented, it sometimes becomes difficult to reoccupy. Chances are that the tenant will push the plot into litigation.

But flats will provide you with a good income from day one if it is given on rent. Chance of litigations can also be avoided by preparing an error-free rent agreement and background checks of the renter.

Future prospects

The demand for plots are always high, and the value of it also appreciates at a faster pace. Along with that, there is zero depreciation on the plot. While if you have bought a flat, it’s rate will also reasonably increase but not as high as the plots.

Delivery time

There can be some delay in getting the possession of the flat, and this will be due to various reasons like time taken by current owners to shift, processing of flat papers, etc. But possession of a plot can be taken readily.

If you are buying a plot in the city, it is possible that you would get it’s possession earlier than a flat.

So if you want to choose between the two, you must first focus on what are your requirements. If you are planning to use the property for personal purposes, then you must invest in a plot. But if you’re interested in selling the property after a short period of time, then it is profitable to buy flats.

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