Plots Gives Better Return On Investment

By: Unknown on 2:08 AM

Common man is always in a state of confusion to decide whether to invest in plots or flats in Bangalore. Flats look like a smart investment as people are assured of guaranteed return on investment in terms of monthly rentals and appreciation of property value. Let’s take a look at pros and cons of investing in plots or flats and help the buyers make the informed decision prior to venturing into such deals.

While buying an apartment customer does not think much about planning, designing and building a home. The buyer just pays the amount and occupies the home that has been provided to him by the builder. He can buy home but cannot make many changes to it, except the interiors.

On the other hand the customer buying residential plots in Bangalore has the flexibility of building the house immediately or at a later stage, whichever is comfortable to him. But he has to spend quite a lot of time to get the home designed, source the raw materials, build the home and manage the manpower.

When a person chooses to buy a site in Bangalore, especially, in rapidly developing areas, then he can reap rich benefits after few years.  When buying a site in a developing area of Bangalore the buyer has to pay lesser amount compared to developed areas of Bangalore. But after a while, when the area witnesses rapid growth and there is a huge influx of people, then the price of the land in that part of Bangalore keeps appreciating at a faster pace. It is not the same with flats because flats become worn out after few years and its value deteriorates compared to a plot in Bangalore.

The constructed home on plots carries the value of home along with the land, while a flat carries just the value of total carpet area along with the common area of an apartment. In some respects buying a flat helps the customers to gain tax benefits from the time of buying it, but, this doesn’t hold same with buying residential land plots. The customer will get the tax benefit only when he finishes constructing a home at that place.

There are few more downsides of buying a flat. The government regards one flat as a place of residing while any other flat apart from it, will be considered as a source of income, especially, in the form of rental. This rental amount is taxable to the customers. But the plots are not subjected to this type of a tax unless the customer has rented it out.

Though, both the sides of this argument carry pros and cons. The amount of time and energy spent on maintaining a plot in Bangalore is much lesser compared to the flats that are rented out. Thus, people can confidently buy sites in Bangalore and hope for better returns, but, they need to consult a lawyer in regards with the authenticity of the paper.