Investing in land and houses have their individual advantages and benefits. Experienced Realtors, however, always recommend investing in vacant land rather than in a house. This is because there are more advantages to investing in a residential plot as compared to investing in a house.
ADVANTAGES OF INVESTING IN PLOTS
For first-time investors, it’s better to purchase vacant plots rather than homes due to several reasons. Some of them are discussed below.
EASIER MAINTENANCE
Plots are much easier to maintain because it requires less money while maintaining a house requires large sums of money. If the investment is made in a secure location, then it is sufficient to pay just a few visits randomly now and then. Even though plots require minimal maintenance, if they are not maintained once or twice a year, they can become a hassle to maintain.
Residential plots are a hassle-free investment because there are several things to keep in check when it comes to homes or apartments. Even though rental properties are a quick way to earn profit returns, dealing with tenants is not for everyone. As tenants do not take care of the property that well, the cost of maintaining the property is higher than the cost of trimming grass on a vacant plot.
Furthermore, another reason why vacant plots are a good investment option is that vacant plots have fewer taxes. Property taxes on homes and apartments are relatively higher which is why most realtors prefer investing in vacant land and not a house.
HIGHER RESALE VALUE
The best part of investing in vacant land is that over time, the market value of the plot increases. The market value of a house decreases over time if not maintained properly. If investors want to sell the house for a higher profit, they need to make sure the property is well maintained and looks new. This is the main reason why people prefer reselling plots rather than flipping a house.
Another downside to reselling a house is the cost of maintenance. Maintaining an old house to resell can cost a lot of money. If an investor does not have the budget to repair or upgrade old properties, they face loss as the house sells for less than what they intended. As for vacant plots, they do not cost that much money to maintain. If there is growth on the vacant plot, it can simply either be burned or be trimmed. Keeping the cost of maintaining a house for reselling purposes, it’s better to invest in a vacant plot.
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FREEDOM TO DO AS YOU PLEASE
Another plus point to buying vacant land instead of an already constructed house is the freedom to build the property however desired. Comparatively, it is cheaper to purchase vacant land and then build the house on it rather than buying an already built house.
Even though building a house from scratch is a hassle, it’s still a better option because this way the investor knows where the money is going. Another advantage to building your own house is the freedom to design it. Most of the times buyers will come across a house that will meet most of their expectations, but with time they come to realize that the house needs maintenance. This is the sole reason most people prefer building their own homes.
PLOTS ARE EASIER TO SELL
Lastly, plots are comparatively easier to sell without spending too much on maintenance. Reselling a house can be tricky and time-consuming while selling vacant land is easy. The reason why it’s easier to sell plots is that the only thing a buyer will pay attention to is the location. If the location is favorable, the plot will sell in no time. As for houses, buyers get nitpicky and will notice every crack, scratch, and design flaw, making it impossible to sell the house in less time.
In the end, it all depends on the purpose of investment. If the purpose is to build a house and rent it out, might as well buy a house. But if the purpose is a long-term investment, it’s better to purchase vacant land.
Author Bio
Muhammad Junaid is a CEO of VM Sol, senior Analyst, and Search Engine Expert. Extensive experience being an IT Manager in Three Quarter Marketing – Real Estate Company. Work for years with local and international enterprises. Also, represent well-known brands in the UAE.
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