FLATS OR PLOTS
“Don’t wait to buy a real estate, buy real estate and wait”
– T.Harv Eker
We all know when it comes to investment, real estate is the best option. But the question is whether to invest in a Flat or a Plot. Here are the pros and cons of investing in a plot and a flat.
Plots: The owner of the plot has the flexibility to construct the home as per their needs and budget.
Flats: The owner of the flats is not given the right to construct or built-out the flat as per their wish.
• Return on investment
Plots: The value of plots has been tremendously appreciating because of less availability of land in cities these days.
The owner of the plot also has the option to get permission for adding more floors to the house and rent them, which can also be a source of income.
Flats: in the case of flats the value of the property increases, when the demand for flats in that particular location increases.
Another reason for the higher value of the plot in comparison to flats is the demand-supply differences.
• Bank Assistance
Plots: Bank provides financial assistance to a plot buyer up to 80% of the purchase price, in the case of resale of the land bank allows up to 50%. The maximum loan tenure period is up to 10 years. The bank sanctions loans to the buyer only when the land is approved by the local municipal authorities.
Flats: Bank easily provides a loan for buying a flat. A Flat buyer can get funding from a bank up to 80%-85% and the maximum loan tenure can go up to 30 years.
• Tax Benefits
Plots: If you purchase a plot with the intention of long-term investment and are planning to sell the property in the future, then there are no tax benefits that you can avail of.
The plot owner can avail of the tax benefits only when they construct the house. The benefits are available for a year (even if the construction is completed). The major Tax benefit is the interest rate deduction, you can avail up to a maximum deduction of 2, 00,000 (Conditions applied).
Flats: A person is allowed to avail of the tax benefits while purchasing the flat. When a buyer takes a home loan to purchase a flat, he can save the monthly repayment of the loan.
Plots: Plots are usually ready for possession. It does not take much time to deliver the plot in comparison to a flat.
Flats: For the possession of a flat it usually takes time when the project is yet to complete. One should always invest in a property, which is being constructed by builders with a track record of on-time delivery.
At the time of possession of a flat, one should ensure that is being delivered as per the written agreement.
Both have their own Pros and Cons, One need to invest as per his/her convenience keeping in mind all the above mentioned aspects.