“Land Vs. Flat” - Where to Invest in India?

It is often a topic of debate as to invest in plot/land or to buy a flat? Well, both are relevant depending on the usage and locality however, there are certain important factors that need to be addressed before investing in either of them.

City

When it comes to buying a plot or land in metro cities like Mumbai, Delhi etc. we can easily say that an investor must have deep pockets in fact very deep pockets as the land price in these cities is sometimes higher than any European city so, it’s better for average investors to invest in flats and choose among short term holding or renting it out for additional income. Smaller cities such as Jaipur, Lucknow etc. investors must notice that there are plots available but land is something that “god is not making any more” so eventually there will be a shortage of land in near future then these plots might make a fortune for the investor. Again the tenure of holding is the key if the investment is meant for short duration it’s better to buy flat.

Locality

Some areas are relatively pricier then the other in each city. For example C-Scheme in Jaipur is so expensive that one square yard of land cost approx. 1.75 lac rupees but, suburbs in 20 kilometer proximity are very much in budget and the commute time is just 15-20 minutes (Thanks to the better roads and metro rails) therefore if someone need to invest in posh areas flats are the only option available plots available in middle budget areas are also an apple in the eye of small builders and duplex or G+ apartments are popping up even there as well making it difficult for middle level investors to buy a plot.

Since we are talking about investment here so I have noticed that those who have invested in plots which were quiet far from the main city 4-5 years back are now in close proximity due to rapid urbanization and better means of communication have gained tremendous growth and worth 10 times more now.

Appreciation

Appreciation of Flats – Factors

-          The flats are better if invested in for short term as there are always new projects coming up resulting in better infrastructure and new construction making it a better prospective then the older flats, the land value is however increasing but due to new constructions it’s a challenge to sell out the older ones.

Appreciation of Plots - Factors

-          Plots are relatively cheaper in outer areas of any city and offer an opportunity to invest even at a basic income contrary to flats the price will always increase resulting on the new developments and constructions. The only thing to keep in mind for investor is that the plot won’t reach great appreciation in a year he must hold it for longer duration at least 5-7 years.

 

 

 

Age of the investor

If a young salaried or self-employed person is investing I would personally suggest to invest in land first and may be in a flat later for additional rental income. The reason for choosing plot over flat is because young people will be needing more money in future for numerous reasons may it be kids’ education, marriage or any mishap and until then the land price of any given area will be supposing much higher .

Some other factors could be long term vs. short term investment, where long term investment is always inclined towards lands while short term investment counts for flats depending on various above given reasons. Moreover if you are planning on using the property for personal use in the coming times then again the question arises how soon? If you are going to shift in your invested property in less than 5 years it’s better to buy a flat but if the time frame is exceeding five years mark a land will be exceptionally good.

Conclusion: Real Estate is apparently the most investment friendly sector and a relatively safer one as compared to stocks and gold. When it comes to choosing between a flat or plot one must address questions such as duration of investment, usage, locality and future developments of the shortlisted area. If the investment is subjected to long term go for a land, if you need immediate rental income or planning to sell it soon flat is a better option.

 

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