This is a dilemma that most second homebuyers face when they start looking for potential sources of investment. To add to this confusion, you are bombarded with advice from well-meaning friends and family suggesting that you purchase a flat in that fancy apartment in electronic city or a plot in South Bangalore. This is a decision that needs careful consideration as each has its pros and cons. But what matters is how well your choice will satisfy your objectives. There are certain factors to keep in mind before you make a decision.
Financial Assistance
Procuring a loan for a flat is much easier when compared to a plot. You need to be financially sound when it comes to purchasing a plot. It is not an easy process and to add to the woes, the tax benefits are available only after the construction is completed on the plot.
Risk
Gone are the days when you would hear tales of projects being delayed resulting in loss to the residents, thanks to the recently introduced RERA Act. One of the primary purposes of this act is to prevent delays on the builder’s part and help resolve issues. In the case of buying a plot, there is the risk of litigation that is usually difficult to resolve.
Rental Income
Apartments in electronic city Bangalore or anywhere for that matter generate a good income from the day of possession and have lesser chances of litigation due to the existing laws. A plot on the other hand is difficult to be rented and reoccupying it will not be easy if the property falls into litigation.
Appreciation
There is a shortage of supply in plots due to which its value appreciates well. If a long-term gain is what you are looking for, a plot would be a good choice but in case of short term gains, an apartment in Electronic city would be well-suited for you. Infrastructure and location play a huge role in the appreciation of both of them.
Tax
You get to enjoy your tax benefits as soon as you start repaying the loan availed by you for a flat. This is not the case with a plot as a tax deduction on interest is allowed only after the completion of construction.
To conclude, the choice between a plot and a ready to move apartment in electronic city is solely based on your requirements. If personal use is what you are seeking, a plot offers you more flexibility and higher appreciation in the long term. However, if you are planning on reselling the property after a short duration then it would be wise to purchase a flat. Since you will not be holding the flat much longer in that case, you will not have an issue with the depreciation factor. If you are a senior citizen or someone who cannot extend much time to maintain the property then it is highly advised that you choose a flat over a plot.
