Quite often, people get stuck while deciding whether they should invest in a plot or a house. It is a general tendency to evaluate the benefits of the property based on its current price. For instance, the difference between the price of a 2 BHK flat in Provident Kenworth, Hyderabad and a same-size plot in the same locality is Rs. 8-10 lakhs. This figure does not help in drawing an inference regarding the profitability of the two options.
To avoid any kind of ambiguity, it is suggested that buyers evaluate what they can and are ready to invest. Considering the same locality and same dimensions, the amount of money that is required to buy a plot is comparatively lower than that of a ready-to-move-in house. However, the cost of buying a plot and constructing a house will be invariably higher than the cost of buying a house or a flat.
The land is a scarce resource, and its value is bound to increase. Plus, the plot does not undergo any depreciation. Thus, the value of land is expected to appreciate rapidly. The resale value of a house depends upon its location and age. An apartment in a posh location will have a high resale value. But a sufficiently old house will be valued after deducting the depreciation costs.
While determining whether to buy a plot or a house, one should also take into consideration the expected returns. If you want to get regular returns in the form of rental income, then buying an independent house is the fitter option. Plots can generate rental income only after the construction of a house, which will comprise a significant time lag and further investment.