Which is better

[Mamatha NPK]

Hi everyone. I am in the state of confusion. Whether it is better to buy a site or buy a built-up house and rent it out for purpose of investment. Please someone reply.
Yours
Mamatha

[shekarvin]

I would suggest you to go for a built up house and rent it out for investment as it fetches rent and also you can claim tax benefits on housing loan. Both independent house and site will have appreciation so it does not make much different when it comes to value of the asset.

[shekarvin]

I would suggest you to go for a built up house and rent it out for investment as it fetches rent and also you can claim tax benefits on housing loan. Both independent house and site will have appreciation so it does not make much different when it comes to value of the asset.

[Mamatha NPK]

thanks for advice.

[shekarvin]

you welcome

[rampi]

The response depends on various circumstances. While house fetches regular income, the income does not justify the interest you need pay unless you are building the house with your own funds. Please remember if you are renting out housing loan may not get tax benefits.
You need to think about the managing the tenants. In case of plot the returns are much better but if you are not regularly visiting the property there could be encroachment problems. There are many factors to consider to compare both and solutions are different for different people as the circumstances are different.

[Mamatha NPK]

Thanks for the advice. I want to invest for tax benefits purposes meanwhile the site which I buy should be safe also if I don't construct the house for another 10yrs. So in that case then should I go for built-up house and rent it out for employees so that the tenants won't be problematic.

[ardesarchitects]

Hi Mamatha,
The most important thing you need to understand that there is clear difference between investment and asset.

1.If you are buying a site it will be investment, your intention here is to sell it and enjoy the returns on investment and Invest the principal again back in to the market.
a.In this case your investment will be less and returns will be more but market price risk ( is always gain & never loss) is involved.
b.You cannot get constant income unless you liquidate the property .
c.Invested money vs returns are always minimum 6-8 folds higher than bank deposit interest.

2.If you are buying a home it will be asset, your intention here is to enjoy the rent you get from it regularly
a.In this case your investment will be huge and returns will be very less with out any market price risk
b.You can get constant income with out selling the property .
c.Invested money vs returns are always lesser than simple bank deposit interest

Regards
Ar.Praveen.N
Ardes Architects and Interior designers
ardesarchitects@gmail.com
www.ardesarchitects.com
https://www.facebook.com/ardes.architects

[Mamatha NPK]

Sir you have given me a very good understanding of the way to invest and to acquire assets as well. Thank you very much.