Achi news desk-
Traditionally, lots have been associated with the benefits of custom built homes, but things are changing now that apartments are being favored
Real estate investments have always been a subject of significant deliberation among investors, especially when it comes to the decision between investing in residential properties such as apartments or floors versus purchasing lots for the development of dream homes. This dilemma has gained importance in recent years, reflecting the evolving preferences and trends in the real estate market.
Change preferences
Traditionally, land investment has been associated with the advantage of full ownership rights to the land and the freedom to build custom structures. However, the last two decades have witnessed a marked change in preferences, especially in metropolitan cities and tier II and III cities, where the culture of apartments and condominiums has increased. Despite this trend, there is a growing demographic that prefers investing in villas or lots for various reasons.
Profit potential
One of the fundamental principles of economics, “high risk, high profit”, is particularly relevant in the field of real estate. Lots tend to command higher prices than apartments in the current market scenario, which offers the potential for significant profits. While investing in lots requires a larger upfront capital outlay, The chance of future returns is considerably higher. On the other hand, apartments may offer relatively low returns in the short term but can be a stable investment option for those looking for a fixed rental income.
Demand dynamics
In cities like Gurugram, Noida and Ghaziabad, there has been a marked rise in demand for plots and projects that offer such options. The increase in demand can be attributed to the paucity of projects of this type in these cities and the growing preference for investing in lots, especially in touristic and religious destinations, where the potential for land appreciation is high.
Risk Management
Investing in lots comes with the advantage of lower risk compared to apartments. Land buyers do not rely on developers for the delivery of the project, as the developers are only responsible for providing infrastructure for the lot. This gives the owners of the lots the flexibility to develop the land according to their preferences, thus reducing the risks of the project. Additionally, land is an appreciated asset, offering long-term appreciation and the freedom to make changes to the property as you wish.
Summary
In conclusion, the choice between investing in apartments and lots ultimately depends on various factors, including individual preferences, risk tolerance and investment goals. Performing thorough due diligence, including research on the developer’s track record and assessing the area’s future development potential, is essential to making an informed decision. In addition, clarifying all financial aspects and discussing the payment terms ensure a safe investment. By weighing these factors carefully, investors can navigate the real estate market effectively and make sound investment decisions that fit their financial goals.
The writer is the founder Homents Pvt Ltd. Views are personal.
Published: April 28, 2024, 4:30 PM IST
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