Investing in the real estate market can be challenging especially where to place your funds, for example, is it a plot of land, an apartment, or a house? While it can get overwhelming, it becomes quite easy if you weigh the pros and cons of each option and determine your needs. Dream location will help you determine those needs whether it is a plot of land in peace and serenity in a suburb or an apartment in a busy part of the city. Also with that, our experts will guide you in making the right decisions when it comes to investing in real estate by breaking its complexities down into easy understandable steps.
The First Step: Understanding the Basics of a Real Estate Investment
The broad differences between a plot of land and an apartment lie in the choices that they present. A plot of a piece of land means that you can customize build your home exactly how you want it. An apartment on the other hand means you want an already built space with some amenities included in it. What this means that if your area of concern is convenience, go for an apartment, while if you prefer designing and customization, go for a piece of land.
Why you should consider investing in plots
1. Complete Control Over Design
Pros: If you own a plot, you can create and build a home that suits your way of living without any restrictions.
Cons: Keep in mind that this process is lengthy and will require a great investment of time on your part hence best suited for people who want to start from ground zero.
2. Passed Down Family Wealth
Pros: Since only a certain amount of land is available, it can skyrocket in price over the years, which is beneficial in terms of profit in the long run.
Cons: However, it is important to keep in mind that an investment’s worth is highly dependent on where it is situated and the surrounding development, as well as how the market is performing entirely.
3. Self Ownership
Pros: The query ‘why buy land’ has a million answers–starting with funding a plot of land by yourself means that you can then build on top of it whenever you want.
Cons: Yet, one of the major drawbacks is that not all builders provide possession of the plot at once, making it a bit uncomfortable to invest in it.
4. Guaranteed Quality Construction
Pros: With constant supervision, you can oversee every construction step and maintain a certain standard of quality.
Cons: Flats come with a catch though, since there are different varieties of developers available, cost control and construction quality will differ.
5. Investment Over the Long Term
Advantages: Good areas and even those that may be less developed but are of a person’s liking, can serve well as buying land for construction in future.
Disadvantages: Returns may take time to materialize and liquidity may be less than that of flats.
UP 3 Cons You’ve Heard From People That Are Investing In A Flat.
1. Close to Ready to Move “Convenience”
Advantages: No waiting for construction work to complete-the best part is that one has ready to move flats.
Disadvantages: There may be less freedom of expressing preferences in case people like customization as it would give a personal touch.
2. Earn Income Each Month Through Rentals
Advantages: Having a flat renders it easy to generate one set amount as constant monthly income which brings greater ease of use.
Disadvantages: Rental income is greatly dependent on the current market along with the location too.
3. Posh Gated Communities
Advantages: In this case ownership is secured from the start as possessing the flat post construction of a gated society is a common trend.
Disadvantages: These societies have their own norms and these sometimes tend to get delayed which makes them inconvenient for the investor.
4. Safety And More Space
Advantages: Residential complexes ensuring greater security along with the shared space and other amenities are becoming more and more common.
Disadvantages: Compared to garland houses-the freedom experienced may be compromised.
5. The Situation Surrounding the Units in Relation to the Amenities and Non Economical Aspects
Pros: Apartments tend to be closer to facilities and thus contribute positively to the humanoid characteristic.
Cons: Due to the limitations of the space, the living areas forming an integral piece of the house are smaller than those found in houses constructed on separate parcels of land.
Ways in Making the Appropriate Decision Between the Two Options
There are several factors that would need to be addressed before moving from a plot to an apartment or a vice versa.
- Investment Goals: You need to consider whether the aim of your investment is to wait it out for a long time for the value to appreciate or simply renting it out or leasing will suffice.
- Financial Capability: Do check whether you are in a position to put down some funds for basic and some supplementary investments in the near future.
- Time Commitment: If you do buy a plot, think about how much time you are willing to spend to build a home on the plot.
- Risk Tolerance: Look into how much risk you can afford to take, which in this instance would be the risk of not seeing any returns for quite a bit of time.
- Lifestyle Preferences: Think about what kind of lifestyle you lead and how it will affect this decision, for example, if you like a custom built living area or one that has already been built.
Some Integral Aspects To Consider When Changing Between An Apartment And A Plot
Effort
Plot:
This would involve purchasing land which in itself is a costly investment. The plan in this case is a rather lengthy one as first, one would decide to do planning and construction, finding the right laborers and obtaining the necessary funds.
Flat:
Flats, on the other hand, require minimal effort from their occupants since most worries are out of their hands; the developers deal with all the headaches apart from furnishing the interior. They also come with high end facilities such as swimming pools, gyms, parking, and security.
Possession
Plot:
Ready to move-in apartments is practically a buy and whisk situation as it allows for almost instant possession, plots and being your property means that you may take your time sub the process of finishing dwelling the situation such improvements do not bother you at all.
Flat:
As it is widely known, acquiring under-construction apartments can take many years but instead of waiting for that long ready to move in flats do come with a price however it is undoubtably the most cheap and quick alternative solution.
Appreciation
Plot:
When we look at the potential returns of investments with regards to plots, they usually end up being much more higher than flats. Since there is a middle sized supply of plots, they definitely favor everyone, including the investors allowing more peoples appreciation as time moves on.
Flat:
In summary, the main contributors to the appreciation of flats include infrastructure and the location of the flat apart from the growth of the market. Sadly, over time there is a possibility of depreciation occurring due to the constant wear and tear of the building.
Income
Plot:
With respect to generating an income through renting out a house, it becomes essential to build a house on a plot first that step wise yields the necessary returns.
Flat:
A far better alternative to this is having a flat as it allows for an immediate influx of rental income, making this property ideal for someone looking for quick income.
Loan
Plot:
But when we talk about constructing a plot these come with complications as getting a loan is difficult, whereas the buying demand of flats is higher and banks are ready to easily approve to that.
Flat:
However, when it comes to financing, flats are advantageous since banks provide them with up to 90% of their purchase price and have lower interest rates as well as longer payment terms.
Tax Benefits
Plot:
In the case of a plot, tax deductions are only available after the house is built.
Flat:
Because of the upfront tax deductions such as the principal, interest and stamp duty, flats are a more viable alternative.
Reasons to Invest: Plot vs Flat
Reasons to Invest in a Plot
- Capital Gains: This strategy is best for those with a long-term horizon and looking for considerable gain in appreciation.
- Personal Touch: Best suited for people who would want their house to be built in a way that meets their tastes.
- Building Management: Good for people who have sufficient time and knowledge to assess construction and investment.
Reasons to Invest in a Flat
- Increased Demand from Young Buyers: The younger generations are more inclined to purchase flats because of work and available facilities.
- Immediacy of Occupancy: Suited for people who want a spot to live in and are pressed for there time.
- Need for Facilities: It is suitable for people who want a protected building, video surveillance, a swimming pool, car space, and a fitness room.
Conclusion: Choosing the Right Investment Option
When discussing the debate of the plot vs flat, the answer is not universal. There are pros and cons of each and it is all dependent on what your personal circumstances are. Consider a plot as it might suit you best if you are looking for an oil painting in the making and have an intention of long term development’s. Alternatively, if you want to be helped by great amenities and good rental returns straight away, the flat certainly is a viable option for you.
Investing with Dream Location, your trustworthy real estate agency, understands that your investment experience is unique. What we promise is optimal support in making sure that your decisions are satisfactory to all your dreams. We will help you make the canvas out of the plot or we will help you with fabric of the flat. In either case, Dream Location assists you to on board ride to a successful real estate investment. Be smart with your investment and let the property stand still as a live image of your dreams and monetary achievements.