In­vest­ment De­ci­sion land or flat

When plan­ning to in­vest in prop­erty, buy­ers are of­ten torn be­tween the op­tion of pur­chas­ing a land or buy­ing an apart­ment. ‘The Realty+ Show’ sec­ond episode de­lib­er­ated on the is­sue.

Realty Plus - - Reality + Show -

In­vest­ments in both flats and plots come with their own set of mer­its and short­com­ings. A plot of land af­fords the buyer the choice of build­ing the house to his own lik­ing whereas buy­ing an apart­ment does away with the has­sle of con­struct­ing and scores higher in terms of se­cu­rity and safety.

Amit B Wad­hwani, Founder, Sai Es­tate Con­sul­tants Chem­bur Pvt Ltd (SECCPL ques­tioned the pan­el­lists, “Are flats a more at­trac­tive op­tion than plots if they are bought keep­ing in mind the in­vest­ment per­spec­tive?” Dr Anurag Ba­tra, Edi­tor in Chief, BW Busi­ness­world stated that firstly buy­ers should be clear of the in­tent to buy and where he wants to in­vest. “If you are buy­ing for self-use, then buy it now be­cause this is the right time to buy real es­tate. In Delhi peo­ple still have the men­tal­ity of buy­ing a plot for self-con­struc­tion, but in Gur­gaon and Noida young gen­er­a­tion is shift­ing to­wards buy­ing flats in projects with added life­style ameni­ties.”

Pradeep Agar­wal, Chair­man, Sig­na­ture Global was of the opinion that buy­ers should in­vest wisely and in the right place. While there is an op­tion of buy­ing af­ford­able flats un­der PMAY scheme, the Haryana gov­ern­ment newly launched Deen Dayal Awas Yo­jna also gives a buyer an op­tion of buy­ing af­ford­able plots of 80-150sqm. He said, “De­vel­op­ers are now al­lowed to de­velop town­ships in 5 acres of land.”

San­jay Gupta, Founder Sad­guna Realty made an ob­ser­va­tion, “In Mumbai land costs are re­ally high, so buy­ing a piece of plot is some­thing which is a mat­ter of lux­ury there.” Ba­tra also agreed that avail­abil­ity of land in city cen­tres is scarce. Yash Miglani, Di­rec­tor, Mig­sun

added, “It is im­por­tant to get the cor­rect in­for­ma­tion about the project and how much yield it will bring for you. If the finer de­tails are stud­ied well than it is ab­so­lutely a great idea to in­vest in real es­tate ei­ther plot or flat. The prices will in­crease in next 2-3 years”

Alishaan Naqvee, Found­ing Part­ner of Lex­coun­sel Law Of­fices giv­ing a le­gal point men­tioned, “Home­buy­ers should do their due dili­gence be­fore in­vest­ing in the prop­erty, RERA and In­sol­vency laws have stream­lined the seg­ment but still a thor­ough check on de­vel­op­ers track record is nec­es­sary.” He also feels that the land is prone to lit­i­ga­tions but a flat comes with nec­es­sary per­mis­sions as taken be­fore­hand by the de­vel­oper be­fore con­struct­ing the project. Miglani

ex­pressed that while land gives the flex­i­bil­ity of con­struc­tion and qual­ity, it re­quires close mon­i­tor­ing by the buyer that can be quite tax­ing. Buy­ing an apart­ment on the other hand is has­sle-free.

af­ford­able hous­ing or Ver­ti­cal slums

Giv­ing an in­ter­est­ing turn to the con­ver­sa­tion, Wad­hwani said, “What I have wit­nessed from my

ex­pe­ri­ence is that the projects not do­ing well are tweaked and termed as af­ford­able hous­ing by de­vel­op­ers. In the name of af­ford­able hous­ing, the car­pet ar­eas are re­duced and con­struc­tion qual­ity is be­low stan­dard more like - ver­ti­cal slums.”

Agar­wal putting the onus on home­buy­ers com­mented, “Cus­tomers should first gather all the rel­e­vant in­for­ma­tion like, what is an af­ford­able hous­ing project, un­der which sec­tion they fall to avail the loans, run a back­ground check on the de­vel­oper and find out if the project comes un­der PMAY pol­icy. Naqvee also agreed that while the re­spon­si­bil­ity of fol­low­ing the guide­lines is on the de­vel­oper, home­buyer too is equally re­spon­si­ble. “Af­ford­able hous­ing is not an in­vest­ment ori­ented project. Also fi­nanc­ing op­tions for land are very lim­ited.”

con­clu­sion

Pan­el­lists con­curred that land has more ap­pre­ci­a­tion but flat can give in­stant re­turns. The two op­tions are like chalk and cheese and of­fer two dif­fer­ent kinds of liv­ing. The buyer is not tech­ni­cally and fi­nan­cially as ex­pe­ri­enced as a de­vel­oper to con­struct a home. In­stead he can ask a de­vel­oper to cus­tom­ize the flat dur­ing the con­struc­tion. Avail­abil­ity of ameni­ties and se­cu­rity are other big ad­van­tages of buy­ing a flat in a project. Lo­ca­tion and bud­get seg­ment shoud be the two im­por­tant con­sid­er­a­tions for any buyer. While flats bring the rental yield, in­vest­ing in plot also makes a great sense if you have the hold­ing ca­pac­ity.”

The fi­nal thoughts that emerged from the dis­cus­sion were that it is im­per­a­tive for buy­ers to con­sider their own set of re­quire­ments and bud­gets and ac­cord­ingly de­cide to in­vest. If the in­vestor wants to use the prop­erty for his per­sonal use, then land could of­fer an ad­van­tage of flex­i­bil­ity and value ap­pre­ci­a­tion in long term. But, if the mo­tive is to re­sale the prop­erty in a short time, then it is more prof­itable to buy a flat.

In Ba­tra opinion, the real es­tate prices will go down by 5% in few months and in­vestors should wait for in­vest­ing in the right prop­erty op­tion that brings good yield for in fu­ture. As Wad­hwani cited, “Flats and Land are two dif­fer­ent kinds of liv­ing mind­sets. In cities like Mumbai, the land cost is so high that flats are the only vi­able op­tion for ma­jor­ity of the home­buy­ers, whereas in places like Delhi NCR one can still weigh be­tween se­lect­ing a plot of land or flat.”

(L-R) san­jay Gupta; pradeep agar­wal; amit wad­hwani; DR. an­nurag Ba­tra; yash miglani; alishaan naqvee

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