Plots vs Flats: The Better Investment Option

In the real estate field, the trending investment is plots and flats. But which one should you invest in? Let's get to know.

As a buyer, there are many details one has to look at before investing. Depending on the purpose of the investment, differences can sway the decision. While plots are just a piece of land, the property always has appreciation since the value only goes up.

Similarly, flats can be more of a residential solution since they have many convenient resources surrounding them. Below are the different aspects and areas to help you choose the best investing option between plots vs flats.

What Is It?

Flat

Flats are residential housing units. They are multi-unit and can come in a variety like 1 BHK, 2 BHK, etc. They often provide several facilities and amenities. Many people opt for flats since it brings out a community and provides many features in their infrastructure; also, depending on the area the flat is situated, there might be more facilities.

Plots

A plot is just a piece of land, and the owned land can use later for many things, including building a house. On an investing front, investing in land can prove very useful since there is constant appreciation in buying a plot. The plots, however, require many legal details to be sorted out before buying the plot.

Comparison Between Plots and Flats

Planning and Effort

A flat might be a better option if you want a hassle-free choice. It has basic amenities, and the developers look after the construction and completion. Only the furnishing needs to be set after; even so, many organisations are providing this service.

Any work done in a plot has to be looked after by yourself, including all the arrangements for every aspect.

Profits and Returns

From an investment-only perspective, flats have a declining value, but the returns of the plots only go higher since plots are less in supply. Infrastructure and the neighbourhood affect the value of the apartment; however, after a certain number of years, the value always comes down.

In the case of plots, depending on the developing surroundings, the returns go higher, and since there is a freedom of construction in plots, they are preferred more comparatively.

Regular Income

A flat might be a better option if the goal is to get a monthly or yearly income. A fully furnished or even semi furnished gets you a regular income, and the maintenance is also quite low. However, this is not an option in the case of plots; unless there is a construction of some sort, a plot is not accessible for earning returns.

Loan

Raising finance for a flat might seem easier than accessing a loan for buying a plot. Certain conditions must be met while looking for a loan to buy a residential plot. There aren't many requirements for a home loan, and many banks offer such loans.

However, it is important to look over the details before approaching a lender. The deed, the type of land or apartment, and all these details will play a role in getting the loan.

Flexibility

Someone who owns a plot can construct and plan according to their wishes and keep their comforts and preferences in mind. Every detail is left to their imagination. You can build your dream house with a plot, and the planning can be done keeping the time in mind.

For a flat, only a few modifications are left to the buyer's preference. There isn't much you can do to expand, and all the details might not necessarily be according to your tastes.

Privacy

There is little to no privacy in a flat. Even if it is spacious with quite a lot of free space, there are still a lot of privacy issues to be looked after. There are also many little problems. Also, there are many requirements for the association as an owner.

None of this is an issue in the case of plots; the place can be spacious enough to have lots of privacy and comfort. Unlike flats, there are no certain requirements and the freedom to be enjoyed in the case of plots.

Cost

Depending on the place, plots are mostly lower in price than flats, even though building a house in the plot may require more money. However, the supply of plots is low, and demand is high. The chances are that the price of a plot will increase over time.

Flats are costlier and based on the amenities offered; there is a far higher chance of the cost going up. As the years go by, the value of the apartment may go low. Also, depending on the location, there might be an opposite effect.

Risks

Every investment has its own set of risks. While buying a plot, a person could end up with a plot with unstable soil, which isn't fit for your ideal plans. Similarly, while buying a flat, there might be a risk in selling the apartment. Or dealing with tenants might not be as easy as it seems. Below are tips to ensure that you make the right choice while investing.

Tips for Investing

Plots

• There are many different kinds of plots (commercial, residential, agricultural) available, and it has to be ensured that a loan (if needed) is available for that kind of land. Ensuring the lenders approve the loan will be useful for the financing.
• The documentation must be carefully reviewed, including the tax receipts, title deeds, etc. Going through the original documents can help remove any further problems. If needed, a lawyer can look over the details as well.
• Certain plots need approval from RERA. It is important to look over the details and to ensure that the documentation process goes smoothly.
• Before buying land, it is good to ensure that the land has certain benefits. Make sure that it is fit for selling the soil is suitable. One can also ensure that the land is available for loans and permits.
• The geographical location of the land plays an important role. The value of the land can increase based on the neighbourhood, the development, etc. So it's important to also keep an eye out for the location.

Flats

• One of the most important details is the builder's reputation. If your investment is in the hands of a reputed developer with a good track record, there is no reason to worry.
• The legal details have to be sorted out. It is also important to ensure that the required permits have been taken for the flats. It can do before sealing the deal.
• The legal details will look over before sanctioning a loan. Ensuring that the flat is well within your budget is also important. Shortlisting and comparing different listings can help in finding a suitable apartment.
• A location is very crucial for the apartment. Since the apartment is a residential unit, it requires connectivity. If the location is underdeveloped, there might not be many buyers, but the apartment cost may increase if the area later develops.
• Little details like the assigned areas, amenities, built-in wardrobes, thickness of walls, materials quality, etc., must be looked after. All these details can play a role in the overall area as well as the building of the apartment.

Pros and Cons of Plots

Pros of Plots

• Privacy
• Cost Friendly
• Freedom
• Personalisation
• Better Investment

Cons of Plots

• Availability of Loans
• Needs Planning
• No Regular Income

Pros and Cons of Flats

Pros of Flats

• Hassle-Free
• Regular Income
• Easy Loan
• Community

Cons of Flats

• No Privacy
• No personal preferences
• Higher Cost
• Space

Conclusion

While investing, you should have a goal in mind, whether it should be plots vs flats. There are various goals, like whether the investment is merely an investment to get the highest returns or a residential option.

Many risks are involved, and you shouldn't invest if the risk is not bearable. While flats might seem easier to buy since they don't require many permissions and requirements, plots are a better investment option. These points should be kept in mind while deciding on an investment.