safe way to invest
Even today, most Indians dream of investing in real estate. But the big question remains whether to buy land or house or flat? Both options have benefits as well as risks. The right choice depends on your need, investment period and risk appetite. Let us understand it in simple language.
Residential property i.e. house or flat has shown steady growth in the long run. In the Money Control report, Fortune Primero Director Rahil Reddy said that in the last 10 years in big cities, house prices have increased by more than 100% in many areas. Residential property in big cities has given better returns than inflation and demand from buyers remains constant.
market trend
At the same time, a different trend has been seen in the luxury segment also. According to Darshini Thanawala, vice president of The Chapter, in high-demand micro markets like Goa, branded and designer luxury homes have performed better than the general market. Limited supply and lifestyle value support them. This means that the prices of premium houses in particular locations can increase rapidly.
On the other hand, the performance of land completely depends on the location. Samujjwal, CEO of The House of Abhinandan Lodha, said that there has been a sharp rise in land prices in cities like Ayodhya and Vrindavan after big infrastructure and religious projects. He believes that land with the right location and clear title can give high returns in the long run.
Who is easier to sell?
If we talk about liquidity i.e. selling quickly, then houses or flats are generally sold quickly. The reason is clear. There are more buyers and bank loan facility is also available. The buyer class of residential property is large, hence its resale is relatively easy.
In case of land, the situation may be slightly different. Buyers are limited and the paperwork process can be lengthy. However, Samujjwal Ghosh says that now due to clean title and infrastructure in branded and digital platform based projects, trust and liquidity is better than before.
What is the impact of taxes and regulations?
Long term capital gains tax is applicable on both land and house. But in residential property the financing and paperwork process is more systematic. After the implementation of Real Estate Regulatory Authority (RERA), transparency in buying a house has increased, which has strengthened the confidence of investors. While buying land, definitely check zoning rules, title clearance and future plans. Acquiring land without due diligence can be risky.
Risk and regular earnings
The biggest feature of a house or flat is that rent can be earned from it. That means you can get regular income. But things like maintenance, society charges and wear and tear of the building over time will also have to be kept in mind. Land does not provide regular income, but if there is development nearby, the price can increase rapidly. Darshini Thanawala believes that in micro markets with good community planning and strong demand, properties retain their value for a long time.
What should be the right strategy?
Experts are of the opinion that if possible, maintain balance in the portfolio. One part in residential property, which can provide stable returns and rent, and the other part in carefully selected land, which can provide huge benefits in the long run. Ultimately the decision depends on your goal, budget and patience.
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