Real-estate has always been a prime investment option for Indians. However, the most commonly discussed options are between investing in flats or plots.
The difference between flats and plots
Flat: A flat is a multistory building where apartments are built on different floors. The apartment usually comprises bedrooms, bathrooms, kitchen and a drawing room.
Plot: A plot is an open land parcel where one can build multiple houses or apartments depending on the number of families living in it. There are many developers who also undertake building your house after construction has been completed.
Let’s find out which one is a better investment option for you.
Price fluctuations: One of the main advantages of investing in plots is that their value does not fluctuate and as much as the value of flats do. The price of the land remains constant over time, whereas the prices of flats fluctuate depending on its location and amenities.
Maintenance charges:
It is obvious that maintenance charges in flats are much higher than that of plots. The maintenance charges usually include maintenance fee, property taxes, water bill and electricity bill. But when it comes to investing in plots, only the property taxes have to be paid monthly.
Capital appreciation:
Real estate has always been a long term investment option that gives high returns after a few years. In case of plots in Lucknow under 10 lakhs, their value can double in 5-6 years mostly due to an increase in infrastructure development around them. In case of flats, their value may not double in the same time period because they are limited by the size which cannot be increased further by any construction work.
Rental income:
Another thing to consider while choosing your investment option is the rental income they provide with time. If you invest in a flat, you can start renting it out right away and generate a huge profit on a monthly basis. But if you invest in plots then you won’t be able to rent out your plot unless you construct something there or sell it off at a higher price after some years.
Return on investment:
ROI is one of the most important factors when it comes to investments. If you are looking for a high return on investments then your best bet would be to invest in plots instead of flats. Plots can give you exponentially higher returns than a flat because its value increases with time.
Resale value:
Another major difference between flats and plots is resale value. It has been observed that plots have higher resale value compared to flats because they appreciate over time but flats depreciate over time.
Availability:
Due to high demand, it is comparatively easier to find a flat than a plot of land at an affordable price in cities like Delhi and Mumbai. However, if you’re looking to buy a plot in smaller towns or suburbs where land is still available at cheaper rates, then it would make more sense for you to invest in a plot in lda colony lucknow rather than flats.
Risk factors:
Plots also involve some risks, like the land may not have electricity and water connections or there may be issues with ownership rights of the land. But these risks can be reduced by doing proper research before purchasing a plot.
