Alright, let’s understand the benefits and drawbacks below.
1) Excellent Growth : Plots generally appreciate faster than apartments, especially if they are located in upcoming development zones (like Hospitals, Collages, Highways and Metro Station).
2) Completely Control in your hands: You have the freedom to build your home according to your own style, budget and timeline and even you can simply hold the land and sell it later for a good profit.
3) Lower Cost: Raw land is usually cheaper than buying a fully constructed property in the same area.
4) No Income From Land: Unlike a flat, a vacant plot will not generate monthly rental income as uusal, unless you lease it out for (like parking or farming).
5) Liquidity Risk: The biggest issue with investing in land is liquidity. If you need money urgently, your land cannot be sold instantly; it takes time. There is always a liquidity issue with land. If you are in desperate need of cash, you might even have to sell it at a lower price. On top of that, you will also have to pay Short-Term Capital Gains (STCG) tax if you sell it within 24 months.
6) Land prices at peak levels.
7) Impact of inflation & crude oil prices.
8) Gold vs Real Estate debate.
9) Rupee depreciation impact.
10) FAR & future development potential.
11) Apartment vs Plot investment./
12) Long term wealth creation through land.
Before investing your hard earned money in plots, watch this complete analysis before investing.