The choice between a plot purchase and buying your own house depends on your financial goals, personal preferences, family needs, and timeframe. Here’s a brief comparison to help you decide.
Pros of buying a plot
- Lower cost: Plots are usually more affordable than ready-to-move houses in the same area.
- Freedom to customise: If you have a plot, you can build your dream home the way you want, which is not the case with most ready-to-move houses, where you have to select among a few options presented by the property seller.
- Lower maintenance cost: Plots do not involve maintenance costs like buildings.
- Appreciation: If you want to invest in property, the price of land usually appreciates faster than a built-in property, more so in developing areas.
- Investment value: Purchasing a plot is ideal for long-term investment if you are not in a hurry to move in.
Cons of buying a plot
- No immediate usage: If you are looking for a property to move in quickly, plot purchase is not an ideal option for you, as you cannot live there unless you construct.
- Cost of construction: Building a house later on your plot is costlier and time-consuming than purchasing a house directly.
- Various approvals needed: You will have to handle permissions, contractors, architects, etc., which is usually handled by the builder in built-in houses.
- Difficult to get a loan: Plot loans are usually harder to get than home loans. Also, plot loans come with a lower loan-to-value ratio (LTV) than home loans.
Pros of buying a house
- Ready to move in: If you need a property to move in right away, buying a house is ideal.
- Benefits of home loans: Home loans come with easier financing and higher tax benefits.
- Saves time and effort: You can save yourself from the hassle of wasting your time and effort in constructing your own house.
- Attractive amenities: If you purchase a house in a society, you get security, electricity, water supply, parking, and other amenities.
Cons of buying a house
- Less flexibility: You don’t have the freedom to choose the design or layout of your house, which is possible in constructing your own house on your plot.
- Higher initial cost: A house is costlier than a plot purchase in the same locality.
- Depreciation: Due to wear and tear, houses lose value over time, whereas plots keep appreciating.
- Maintenance cost: You will have to take care of the regular upkeep and repair work as required.
Conclusion:
Buy a plot if you are looking for a long-term investment, want design control, and can wait longer to move in. Buy a house if you want a home soon or don’t want to deal with construction.