Flats vs. Plots from an Investment Perspective

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Flats vs. Plots

Here are some reasons to choose inviting flats vs. plots from an investment perspective. Check out these reasons to select flats vs. plots for your dream investment.

Investing in Flats vs. Plots

Let’s check the reasons to buy flats vs. plots in the city of your choice.

Resale Value

Parcels – When considering the resale value of a home, most people prefer to buy a parcel and build their own home rather than buying a built-in home. However, with the rising cost of construction and rising land values, there are also buyers to build detached houses. In the case of a house, the value is directly proportional to the facilities available within the house and the accessibility around it.

Flats – For flats, property values increase as the demand for flats in that particular location experiences upward growth. Get your favorite 2 or 3 BHK flats in Jagatpura Jaipur in your budget to get ROI in the future.

Rate of Return

Parcels: In the case of a detached house on a parcel, the value of the land appreciates; however, there is usually depreciation in the value of the asset due to wear and tear. Particular attention should be paid to space planning, construction quality, and quality of amenities, as they act as deciding factors for valuation. Another reason for the higher value of the plot compared to the apartments is the differences between supply and demand. Additionally, the homeowner has the option of obtaining permission to add floors to the home and rent or resell them.

Flats: In general, the supply of independent homes is lower compared to flats.

Opportunity Costs

Plots: Building an independent house from scrape is quite a challenging task. Acquire raw materials, get the right workforce, exchange ideas with architects; everything requires personal supervision. If you have an occupation, it is very difficult to physically supervise everything. The construction technology has changed, but it cannot be used for freestanding houses, as the cost would be enormous. There are enormous opportunity costs involved when a person puts his life on hold to build a home for her family.

Floors: On the other hand, the floors have no such hassles. One can move in after taking possession and decorate the place according to their lifestyle and taste without compromising work.

Funds

Parcels: A buyer can raise funds to buy a parcel, but the loan will be sanctioned only if the land has been approved by the local municipal authority. Banks allow 80% loan to value (LTV), but in the case of resale land, only about 50% of the LTV is allowed. The term of the home loan is the highest of 15 years.

Flats – Home loan buyers get nearly 80-85% financing and the maximum loan tenure for a flat can be up to 30 years.

Conclusion

Both the plot and the flat have their pros and cons, so the best approach to choosing a suitable investment route would be to analyze the respective needs, financial capacities, and liabilities. If one is simply looking to invest funds for a few years until ready to commit to the house, a plot in a prime location that will see appreciation in the future would be a good idea. However, if one is looking for regular returns, investing in a flat is the best option. If the property is acquired for personal use, the land could offer a flexibility of use advantage and an attractive long-term value appreciation.

However, if one plans to resell the property after a short period, then it is more profitable to take a position in flats as its value keeps increasing due to its high demand. If your goal is to earn regular rental income, you should invest in a built-up flat. You can rent an apartment to earn some income, whenever you want. If the investor is a senior citizen or someone with limited mobility and resources that cannot spend a lot of time maintaining the property, then it is advisable to opt for a flat on land. If you really want to flat to live in a city like Jaipur, you should opt for 2 BHK flats in Jagatpura Jaipur.

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