Land vs Apartments: Which is a better investment?

When it come to home, buying a ready-made apartment is relatively good as it saves you from all the hassles of building a house on land. But when it comes to investment both have their own advantages and disadvantages. The following comparison can help you in taking the right decision.


Cost

When it comes to the most important part of investment which is cost, it mainly depends on locality, size and availability of space in both the cases. However in case of apartments, buying it from a reputed developer are relatively costly. 

Investment Appreciation

With space availability vanishing quickly in every city, the land value is expected to appreciate very quickly. Flexibility of option to build as per future requirement helps the cost of land and property to increases very fast whereas an apartment has a limited life span, so its value has a diminishing effect. After a certain period of time, there is stagnancy in the growth. Lack of flexibility in use, modification and expansion are hindrance to a quicker growth with respect to land.

Risk 

The land is prone to litigation and it is very difficult to come out of it once anyone is involved whereas in case of a flat the delay in possession by developer is one of the most common problems. Quality is often compromised by the developer to control the cost and meet the deadline so the life of apartments gets reduced. 

Bank Assistance 

The buyer has limited options to leverage its financial position for buying a land property as banks usually doesn't provide finance for buying a land. It’s very easy to take a bank loan for buying an apartment. 

Regular Income Source

Land generates a very low income if rented and sometimes it is difficult to reoccupy the land if the tenant pushes the property into litigation. Flats are ready to generate handsome income from the first day of taking the possession if it is given on rent. There is less chances of litigation with modern laws in place. 

Liquidity and future prospect 

Land is always in great demand. The value normally appreciates immediately due to zero depreciation on land. The depreciation on construction reduces the growth rate, therefore its value grows with a diminishing rate.


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