Apartments vs Villas vs Plots - Which is the best option to buy

Apartments vs Villas vs Plots – Which is the best option to buy?

Let’s start on a positive note. You are Buying your new home then one of the most important questions you will have to answer when you decide to purchase your house is whether it should be a plot, a flat, or a large attached house, or a Villa. Other than the monetary factors, other factors can affect the uniqueness of each option. Considerations include the initial investment, return rate, resale price, personal characteristics such as marital status, job (whether frequent transfers are required), and the family size.

These are not only lifestyle preferences. Here are the reasons for each plot, apartment, and villa individually.


General Features

In India, apartments are becoming the most sought-after property type. Apartments are popular due to their modern appearance, better security, and more amenities. Developers usually take care of maintenance and water supply issues. If you’re looking to buy a property for end use, apartments may be your best choice unless you wish to build your own home. These units are readily available, so you have many options depending on your location, budget, and other preferences.

Opportunities for earning/income

If you plan to occupy the apartment later, you can put it up for rent and revoke the EMIs if you have taken out a home loan.

An apartment is a better investment than a plot or house because it has a higher resale price and can attract more buyers. These units are in high demand, and it is easier to find buyers for apartments than houses or residential plots.

A flat’s appreciation rate may be slower than a plot. The land’s price is what usually appreciates. Considering the wear and tear that has occurred over time, the structure might experience some depreciation.

Tax implications

You are eligible for certain tax benefits when you use a home loan to purchase an apartment. You can get a tax deduction of up to Rs 2 Lakh per financial year if the property is for personal use. A Rs 1 lakh deduction is also available on the principal amount.

But, it is essential to remember that rent you earn from a property you own will be considered income and be taxable. 


Investors who want to see a substantial capital return on their investment and those who are looking for freedom in building and designing their homes will prefer plots. You must have strong financial backing if you intend to use the plot to build a home. Building a home is a time-consuming and difficult task. Although banks offer loans to plot buyers, the terms and conditions for these loans are more strict than those that apply to apartment purchases.

The maximum loan limit for land purchases is typically lower than that for construction loans. You might need to pay a higher down payment to buy a plot.

Opportunities for earning/income

You cannot rent plots unless you build a home. It is believed that plots offer a greater rate of capital appreciation than built structures. This is true if the market is profitable and the demand exceeds the supply.

Tax implications

You cannot get tax exemptions if you borrow money to purchase a plot. If the house is built on the plot, you can claim tax deductions. The tax deduction can only be used for the amount borrowed against construction.

If the area of the plot you have invested in exceeds 500 sq. If the plot is more than 500 sq. metres in size and is not used, you will have to pay wealth taxes.

House/ Villas

General Features

People who prefer the privacy and convenience of a villa or independent house but don’t want to have to build a home are more likely to choose villas or houses. These units have a few drawbacks. They lack security, power, and water backup. This is often offered by society complexes. Developers are now offering these units in gated communities that offers both individual and shared amenities.

Opportunities for earning/income

Capital appreciation may not be as high for villas or independent houses than it is for apartments or plots. This is due to the large initial capital required and the low demand compared to apartments.

These units usually rent for more than apartments, with monthly rents that are often much higher than apartments. It is not easy to find tenants due to the high cost.

Tax implications

The tax implications of apartments are the same as those for apartments.

Studio Apartments

A studio apartment is a small, one-room apartment that includes a bedroom, a kitchen, and a living space. This residential layout has been a hit with single-working individuals due to their desire to own real estate.

Opportunities for earning/income

A studio apartment usually has higher rental returns than a two- or three-bedroom apartment. These studio apartments are furnished fully and have more amenities than regular flats.

Studio apartments offer a high appreciation potential for capital values. Studio apartments have seen a substantial demand increase due to the increasing migration toward IT/ITeS-driven cities.

Tax implications

Studio apartments are eligible for the same tax deductions as regular apartments.

Serviced Apartments

General Features

A furnished apartment is a type of furnished apartment available for long-term or short-term stays and provides amenities for daily living. Apartments that are serviced can be cheaper than comparable hotel rooms. This realty segment has seen a significant rise in demand since the advent of affordable international travel and the boom in information technology.

Opportunities for earning/income

Serviced apartments have a higher return than residential projects and a lower risk. Because you can earn a fixed rental income, serviced apartments are a safe investment. A long-term lease can be arranged that requires minimal management and maintenance.

Tax implications

Serviced apartments also qualify for the tax deductions you are entitled to on rental apartments.

Vacation Homes

General Features

The trend of investing in a vacation home or weekend home has been growing steadily over recent years. People can afford more properties, especially if they have higher disposable incomes. This is especially true for locations that can be used as vacation homes during family holidays.

How to earn

The best thing about vacation homes is the possibility of generating more rental income. Vacation homes in desirable areas are popular with tourists and travelers during peak seasons. You can pay your mortgage and other property-related expenses using the rental income.

Tax implications

In the interim Finance Minister, income tax was eliminated on rent from the second home. This benefits those who have two homes, provided that there are no outstanding loans on the second.

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