Real estate investment comprises of a lot of benefits. People usually invest in property to absorb a number of benefits like a strong passive income, a stable cash flow, tax benefits, leverage, and diversification. Meanwhile, it is difficult for an investor to invest whether in Are Apartments a Better Investment Than Plots?. If you are also confused or it is your beginning as an investor, here is a complete guide to help you out of this chaos. Investment in plots is considered to be a most profitable business because it ensures financial security and provides several opportunities to expand and flourish your wealth and assets. But it has certain pros and cons to notice as well. Given below is an account of them.
Strengths to Invest in Plots
1- Multiple Usage Purposes
One of the major advantage of owning a plot is that it is free to use in any form. It has the ability to consume the barren land according to the desire, need and requirement. For instance, if the location is in some metropolitan and posh area, it can easily be used to host any event or project. It will provide extra passive income and revenue. Open air events are already trending high these days. People love to celebrate their moments in outdoor settings. This implies more demand and revenue.
2- Comparatively less Expensive
If your bank balance is not too heavy or you want to invest a relatively lesser amount, investing in plots is the right answer to opt for. The costs of plots are comparatively lesser than apartments. Hence, it paves a wider way to compensate. Currently, plot files are also available in underdeveloped societies to ensure the recognition of holder. Their physical appearance might not exist but the paperwork is claimed to be authentic.
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3- Allows more Versatility
Plots have customization options to ensure construction on demand and requirement. Most customers demand for a customized design according to their needs, interest and requirement. Investing in plots permits this factor.
4- Reliable Investment
With passage of time, the rate of urbanization is increasing at a rapid pace. Buyers are always looking for commercial and residential plots to meet the high rated demands. Secondly, plots are very rare to depreciate. That is why their selling price always guarantees a surplus yield.
Weaknesses to invest in Plots
1- Rising prices of Raw Building Material
The most prominent and major con in investing in plots isthe highly increasing cost of construction. The prices of raw building materials are fluctuating at a rapid rate. Therefore, the amount of profit might get affected. Inflation is the major factor here. So it is important to observe the market as well.
2- No Revenue Generation
Apartments and buildings can easily be rented out as an income source. But, the case is different in owning a plot. Your investment is always rigid and stuck until and unless you use it for events and activities.
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3- Absence of Payment facilities
Overall there are banks and other institutions to offer you loans for apartments and houses. Unfortunately, it is very hard to find one for buying a plot.
Investing in Apartments
Big cities are getting populated and dense with time. This is resulting in progressive vertical buildings and property. Meanwhile, the demand of affordable housing also gets high. Investing in an apartment can prove to be an excellent investment idea but keeping the pros and cons in mind is necessary too. We have listed down major of them.
Strengths to invest in Apartments
1-Secure Passive Earning
Renting out a complete apartment for residential purposes is one of the best ideas to earn strong frequently. Even the renting amount also increases with time. Therefore, it is a positive cash flow and a very heavy passive income. All you need is to observe maintenance.
2-Frequently Increasing Value
If the apartment is located in a very developed area, its value and worth increase at an extremely high rate. So, apartments can be a very source of income in the future as well.
3- Heavy Market Value
The trend of owning a large, wide, and expanded home is getting replaced with modern compact apartments because of the extreme hike in the value of the property. It is easier to own an apartment with all modern features than to go for a home. However, the high market demand of apartments is also a major factor to encourage.
Weaknesses of Investing in Apartments
1- Relatively More Expensive
Buying a fully designed apartment is quite expensive and hard these days. It demands a very handsome amount in your bank account. Unlike investing in plots, you will need a huge amount to invest in. Sometimes it takes relatively more time to rent out.
2-Worth may Decline
The value or an apartment may depreciate with time. Because continuous usage might affect basic infrastructures. That includes defective water supply, damaged electric wirings, faded floors, and damp walls. This all cause a significant decline in value and worth.
3-Hard to Sale immediately
It is said that buyers are more likely to opt for land than constructed properties. As the land purchase is more flexible, easier, and immediate. In addition, apartments are a little tricky and hard to sell ultimately. The process takes time and proper consultation. There are certain factors that need to be resolved before claiming a property for sale. But still, it is hard for an investor to sell an apartment urgently like a plot.
In the final analysis, it is important to focus on the needs of investors before opting for the right option. Though, the needs and requirements of investors casually vary from one another. Hence, investing in both plots and apartments have its own primary purposes. If an investor is looking for a long term gain, he should choose plot investment. And if the primary concern is to get a passive income, then investing in an apartment is the right way. Thus, the decision still applies to the investor to match his requirements and weigh the pros over the cons.
