In India, many families consider buying a plot of land as a traditional form of investment for the future. Purchasing a plot of land is a huge investment and requires a sound knowledge of investment and financial backing for the initial investment. This article is about why investing in plot is the right decision and a person should consider investing in plot.
Easy bank loans and tax benefit
These days, many banking institutions offer easy loans for investing in plots to individuals. One can also avail loans for construction of homes once the plot of land is purchased. Apart from loans, banks also give associated tax benefits. These tax benefits are offered on completion of construction of the house on the plot for the first year.
Many new home builders think that building a house from the scratch is an expensive and cumbersome project which can require constant monitoring of construction activities from meeting the architects to ensuring the correct usage of raw materials. But this is not entirely correct. Many of the first time builders stretch the budget. With the right planning and expertise, the cost of building a home is lesser if not equivalent to the cost of buying a new apartment. Apart from the cost, the other advantage is that it gives the builder the freedom to choose a layout and design.
As compared to flats, the resale value of a plot and independent house is greater. The return on investment is high for independent houses. The resale value of a house has direct correlation with the location of the house, amenities within the house and accessibility around it. To simplify, houses have a higher resale value than flats primarily because the buyer acquires the plot of land as well on which the house has been constructed.
Rate of Return
Individual land as an investment option is always popular because of its better resale value when compared to residential properties. In case of an independent house on a plot, the value of the land appreciates faster than an apartment because of the demand-supply differences and also the basic infrastructure around the property is good which ensures higher return on investment. In the real estate market, the supply of the independent plots and houses is generally lower as compared to apartments.
On time delivery
As compared to apartments, individual plots are delivered faster than apartments. Delivery of apartments may take longer due to several external and internal factors. But the delivery of plots is faster and hassle free. Once the payment is made, there is no financial obligation from the buyer's side.