Land Or Flat, what makes for a better option?

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The investor normally falls into the dilemma when it comes to investing in land or an apartment/flat. Both the investments have some advantages and disadvantages, but there are a few important points that can help an investor arrive at a definite stand.

Lets check out below few factors which can help in taking the appropriate decision:

COST: The cost of Land depends on locality, size and availability of space, so the cost involved in purchasing a vacant land is higher as it incurs the extra cost of constructing the house on it. Where as the cost for plot depends on locality, services, accessibility, size, design & brand of the developer.

VALUE APPRECIATION: When looked at from the perspective of cost and price appreciation, investing in land seems to be the better option. The land prices are bound to appreciate if the basic infrastructure around the property grows. A flat has a limited life span, so its value has a diminishing effect. After a certain period of time, there is stagnancy in the growth. The appreciation of flat also depends upon the demand of residential flats in any location.

BANK ASSISTANCE: The buyer has limited options to leverage its financial position for buying a land property as banks usually doesn’t provide finance for buying a land/plot. In case of Flat its very easy to take bank loan

INCOME GENERATION: One of the biggest negatives of land is that it generates a very low income if rented out. At times, there are difficulties in getting the land plot reoccupied if the tenant pushes the property into litigation. On the other hand, flats are ready to generate income from the first day if it is given on rent.

To conclude, the best investment avenue between a land and flat, one should first focus on one’s own requirements. If the investor wants to use the property for the his personal use, then land could offer an advantage of usage flexibility and handsome value appreciation in long term. However, if the investor wants to resell the property after a short period then it is more profitable to take a position in flats. As an investor is not required to hold the flat for a long term, it also eliminates the depreciation factor. 

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