Plot vs Flat – Should I invest in flat or plot?

Investing in plot vs flat, is a classic dilemma which every real estate investor faces especially when looking to invest in a second property. Both types of properties have their own set of advantages and shortcomings.

A plot provides you with more flexibility to build the house as per your liking while a flat offers better security and accessibility. In this article, we provide you with a detailed analysis and comparison of both types of properties so that you can decide for yourself whether to invest in a flat or plot.

Plot vs Flat – A Comparison

Particular Plot Flat
Cost In urban areas, it is quite expensive to purchase a plot and then build a house. However, in outer city areas you can get land at reasonable rates with chances of good appreciation. Compared to a plot, a flat can be owned at all price points depending on locality, size and accessibility.
Value Appreciation A raw plot in an urban or developing area appreciates much faster than a built up house or a flat as there is no depreciation of building to be factored in . Since, the building depreciates over time, a flat does not appreciate as well as a plot.
Regular Income A plot of land generates a very low or negligible rental income compared to a built up house. After possession, a flat can beimmediately rented out and it will start earning income for you.
Value for Money Since, you have full control on construction, a plot offers great value for money. A flat offers lesser value for money because the developer loads his costs and profits in the property.
Bank Loans Generally, it is difficult to get a home loan to buy raw plot. However, you can get loan for built up house or for construction. A flat can be easily financed by any bank provided the title is clear.
Legal Verification You will have to do your own verification as banks do not generally finance plots. Banks have their own legal teams to conduct due diligence of projects and individual properties. You can safely rely on their expertise.
Tax Benefits Tax benefits ar not available for a plot alone. You can avail tax benefits only after construction completion. Full tax benefits are available from the time of possession of home.
Construction Quality You can ensure best quality construction on your plot as you have direct control on products and the contractor. In case of flat construction, developers often compromise on quality to control costs and meet deadlines.
Convenience The whole process of constructing a house on a plot is cumbersome and involves personal time and commitment. Investing in a flat is very convenient. It is constructed by the developer. You only need to get the interiors done when the flat is ready to move in.
Flexibility You can construct and modify your house on a plot as per your requirements and available resources. You cannot expand or make structural changes to a flat. You can only make limited modifcations internally.
Security Unless your plot is in a gated community, you will have to invest separately in security. Flats are generally within gated complexes and are very secured.
Amenities Common facilities like swimming pool, gymnasium, club etc. are not easily available in plotted developments. It is difficult for an individual to invest in all such facilities. Gated complexes have all amenities like swimming pool, gymnasium, club, shopping center within the complex itself. All costs are shared among residents.
Risks Plots in an undeveloped or unguarded place face the risk of encroachment. You can easily lock your apartment. There are no encroachment risks.


Final Word – Flat or Plot?

Although it is a personal choice while choosing to invest in a plot vs flat, following guidelines may help.

Invest in a plot, if:

  • you are looking at capital appreciation
  • you want to build your house as per your own terms
  • you have enough time to monitor your investment and construction progress

Invest in a flat, if:

  • you are looking for regular rental income
  • you do not have enough time at your disposal
  • you want better security and common amenities like club, swimming pool, gymnasium etc.
  • you are looking at bank financing

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