Master Plan – What is Master Plan and why is it important?

What is Master Plan?

Master Plan is an evolving long term perspective plan document which acts as a guide to the sustainable and planned development of a city. It includes planning guidelines, policies, space requirements and development plans for various socio-economic activities such as housing, transportation, community facilities etc. that support the city population.

Why a Master Plan is important in Real Estate Investing?

If you are a Real Estate investor, you might have overlooked the Master Plan of the city where you invest or are planning to invest. What do you think instigates a builder to buy land in some areas and not others? Got some hints? Here are few reasons that may compel you to take Master Plans more seriously than before:

1. Land Use Maps

A Master Plan provides proposed land-use maps of all areas within the city. Using this land-use map, you can invest in land from a future perspective for eg. you can purchase an agricultural land parcel that is in residential zone as per master plan. In future, you can either sell the land at a much higher valuation or develop the land yourself.

2. Planned Economic Activities

The Master Plan details the planned economic activities in various areas. It is a vision document for a city. From the master plan, you can identify industrial belts and where the economic activities will take place in future.what-is-master-plan

3. Planned Infrastructure

Everybody knows that improved transportation and social infrastructure is a key factor in uptrend of real estate prices. How about knowing few things in advance which are out of sight of general public right now? A Master Plan can tell you about the proposed metro or the six-lane expressway much before when others would start talking about it.

4. Planned Population

Every Master Plan is made for a future population estimate for the plan period. More population in a city means more demand for housing which leads to increase in real estate prices.

5. Avoiding Frauds and Traps

Frauds and traps are not unfamiliar terms when we talk about Real Estate in India. You would have heard stories about builders duping innocent investors by selling dreams of homes or offering multifold returns in a short time. Often, they would purchase a small portion of agricultural land and sell residential plots without any approvals. In reality, the builder may not receive any approvals at all because that land may not come under residential zone as per Master Plan.

These are some of the reasons that makes a Master Plan an important tool while analyzing a Real Estate investment. An understanding of the Master Plan of a city will not only give you an edge over other investors but also provide you with a future perspective of the city.

Though it may seem common sense that everyone must be looking at a Master Plan before investing, the truth is far from that. Perhaps, because extracting the right information itself is a tedious task. First, you have to spend some time on internet before you can get hold of the land-use plans and the detailed master plan report. Then, once you get hold of the Master Plan, you may not read beyond second or third page of the 250 page document. For this reason, we have compiled Master Plans of all major cities of India at one place. We have also provided key features for each and every Master Plan so that you do not have to spend hours retrieving the useful information. Check them out here:

Master Plans – Indian Cities

Hope you enjoyed this article on “What is Master Plan and why is it important“.

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About Mukul Malik

Mukul Malik is the founder and editor of AssetYogi.com. He is passionate about Real Estate, Personal Finance, and Digital Marketing. He believes that Asset Creation is Wealth Creation in Auto Mode and likes to help others create Real Assets with knowledge and research. Connect with him on Google+.

2 comments

  1. Like in stocks buying P/E ratio shows whether the stock is of potential value let it be costly or cheaper is anything like in real estate investment ? why i asked i am fond of investing in many asset classes including real estate, while checking with corporate developer like tata housing, godrej and mahindra I feel many a times it is overpriced. charging higher for brand value, transparency, timely possesion. free of encumbrance etc etc compared to local developers is definitely justified but how a customer will decide which one is well priced and which one is overpriced so that he can reap the benefit of capital appreciation.

    • Hi Babuli

      This is a good question. My take:
      1. P/E is just one of the ways to value stocks. We compare P/E of stocks in the same industry. Eg. we can compare Tata Steel with SAIL but not Tata Steel with India Cements. It gives an idea about valuation compared to peers. Similarly, in Real Estate we should compare projects which are giving similar value. They should be priced about equal. If not, then one can be overpriced.
      2. Like stocks, even Real Estate should be valued using many factors like how much rent you can expect, what kind of infrastructure is coming up, what is the industry outlook, how is the location, how is the track record of developer, do I need rent or capital appreciation and so on.
      3. If you are looking for investment, never get impressed with frills attached with the property. I am not saying don’t invest in premium properties. But compare properties which are offering similar value and simply invest in the one which is offering more value at lesser price. If you do proper research, you can definitely find gems.

      Hope it helps. What is your take?

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