Apartments,Villas,Plots- Which is the best option to Buy ?


Date: 19-April,2019Last Updated: 20-January,2021
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1. Apartments

Apartments are multi-storeyed buildings comprising numerous individual housing units. When compared to villas and plots, apartments are the most sought after and sold properties in India. Contemporary looks, Modern Amenities, and Better Security are some of the reasons why they are preferred. Unless the buyer has an intent to design his own property, Apartments for sale have been the top choice consistently. It is advised to homebuyers that after analysing various aspects like budget, location, and other preferences, make a decision from the plenty of options available in ready to move in flats.

Some homes are purchased from an investor's perspective. From an investor’s standpoint, factors like Rental Yield and Capital Appreciation are key. These properties are generally rented out. What’s left to be considered is external factors like Location, Accessibility, and Demand for the Properties for sale in a specific locale which impact the overall financial prospect of the property.

Apartments are known to have high resale value and a wider buyer base. As the demand for flats is generally higher, it is understood that finding a buyer for a flat is easier.

One aspect where apartments lag behind their counterparts is Appreciation. Primarily, appreciation is realized on the value of the land. So, when it comes to apartments, the wear and tear of the building increase the rate of depreciation.

  • Impact on Tax

A person can avail some tax benefits when he or she buys an apartment. In case of the self-possession of the property, a taxpayer is eligible to avail tax rebate of up to Rs 2 lakh on the interest paid per financial year. Additionally, they can avail Rs 1 Lakh on the principal amount paid.

In the case of renting the property out, the rent collected is taxable as it is considered income.

2. Plots

  • Features

Plots are the basic units of land with no built-up space. They are ideally bought by people looking to build their own home as per their taste and need or an investor seeking to reap heavy profits on their investment.

In any scenario, building a house is a meticulous task. If one’s thinking of building a home, considering the extent of financial backing as the owner land, construction, architects, designers and labour cost. Let’s not forget it is extremely challenging and time-consuming to buy plots for sale and build a home. Financially speaking, banks to give loans for purchasing plots but they are relatively stern and different when compared to the loan for an apartment. If we were to take an example, the loan limit for a land purchase loan is lower than the loan limit for a constructed structure. What this means is that one has to shell a larger down payment for plot when compared to a flat.

  • Scope of Return on Investment

It’s a known fact that plots can’t be rented out without any built structure. But interestingly, when compared to apartments plots have higher rates of capital appreciation which is seen when the sale is done in a lucrative market scenario. One more factor is the proportionality of demand and supply. The ideal time is when the demand is higher than supply.

  • Impact on Tax

In the case of loan for a plot purchase, one is not eligible for tax exemptions. If a structure is being built on the plot then one can avail tax exemptions for the loan amount sanctioned for the construction. This can be done only after the construction is completed. Another important fact is that if a plot more than 500 square metres in the area is vacant then it is liable for a wealth tax.

3. Houses/Villas

  • Features

People who prefer privacy choose to buy independent houses and villas for sale. The disadvantages that come with the purchase of an individual house or villa are lack of security and power and water backup. However, what’s interesting is that in gated communities, property developers offer security and power back up with a wide range of options and shared amenities. These are features that societies give.

  • Scope of Return on Investment

Coming to the financial aspects of individual houses for sale and villas, capital appreciation is low compared to apartments and plots which is due to the higher capital initially and lacklustre demand later.

The rental yield is higher when compared to apartments but when this is calculated with respect to initial capital invested. But let’s not forget that its relatively difficult to find tenants for villas when compared to apartments.

  • Impact on Tax

In case of the self-possession of the property, a taxpayer is eligible to avail tax rebate of up to Rs 2 lakh on the interest paid per financial year. Additionally, they can avail Rs 1 Lakh on the principal amount paid.

In the case of renting the property out, the rent collected is taxable as it is considered income.

Homes247.in Expert’s View

We at Homes247.in have always been of the belief that apartments are a better option when compared to plots and villas looking at the advantages that it has.

But what we educate our customers is that they should be perfectly apt for their personal taste and needs.

Hence, we suggest our homebuyers to take a decision that suits them right and enjoy the comforts of their future dream home.

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