HOME OR PLOT: WHICH IS THE BEST INVESTMENT OPTION?

Introduction

Real estate investment is always a huge move and the most expensive investment option. There are a host of real estate investment options available to you today. Homes, apartments, plots are some of the options you can choose from. The big question is which real estate investment is the best. Should you buy a home or a plot? This also depends on why you are making this investment. There are a number of factors that drive your investment journey. In most cultures, there is a need to leave behind a legacy for the future generations. Most of the time, the ownership of a house or an apartment is considered a high-status value as opposed to living in a rental place. Yet, for others who have had enough, a real estate move can be a sheer investment and tax saving option.

Which is the best investment option?

Having a checklist or atleast a list of important factors will help you through your investment option.

1.  Consider the basics first. Do you have adequate finance to manage to buy a home or build your dream home on a plot?
2.  It’s a fact that getting a loan for your plot may prove much more tougher than getting a financial loan for your apartment.
3.  One of the biggest reasons why a lot of people today invest in real estate properties is the immense tax benefits that can be availed from the property. Even in such scenarios, your plot may not attract as much as benefits as your apartment does.
4. Another important factor that should guide you is whether you prefer to choose from a list of already approved structures and plan from the builder, or if you want to have the flexibility in designing your space to suit your tastes. So if you want to build a villa, buy a plot where you can be creative with your design.

Next, determine if there are clear monetary benefits that this investment will deliver. While plots do not provide rental income, land value always appreciates faster. On the contrary, apartments can be rented out based on the current rental value for that area. So the gains are realised almost immediately, taking into consideration the time required to find a tenant who agrees to the terms and conditions.

Another innovative method to realise value for your plot is to build a few floors that you can rent out and earn income. The value of a property also appreciates based on the infrastructure available in and around the area such as the accessibility to the main transport services, roads, schools, medical facilities and super markets. Having everything in close proximity makes the real estate property that much more valuable and in-demand.

An apartment may experience a slower appreciation of value owing to the natural wear and tear of the building. This is not the case with a plot, which attracts wealthy buyers who want to build their own structure. In general, plots enjoy a much better resale value than apartments or homes.