[ecis2016.org] While apartments are cheaper than independent houses, there are certain advantages of each property type that home buyers must be aware of, before making a purchase
Most home buyers give a lot of importance to the location and the type of interiors, while choosing their homes. A better location promises better appreciation on property investment. When it comes to the type of property, there are few choices for buyers in metro cities, as high real estate prices compel people to look for projects within their budgets. Before proceeding, let’s first know what independent house means and what flat means.
What are independent houses?
They are houses which are standalone and constructed on a land plot. Mostly, they are low rise building. Nowadays, most developers also sell luxurious independent villas as part of gated communities.
What are flats?
Flats are many housing units in a single building that is made on a parcel of land. While flat house/ apartments are cheaper than independent houses, such as villas or independent floors, there are certain advantages of each property type that a home buyer must know of, before making a purchase.
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Flat vs house: Amenities
When you are planning between buying a flat or house, think about the amenities you may want. If you are buying a flat house in a housing society, you may get access to all modern amenities, including security, surveillance, parking spaces, power back-up, fire safety mechanisms, etc. but all these facilities come at an additional cost of around 20%-25% of the property’s cost. These may include setting up a power back-up system for each room, hiring security staff or installing cameras and arranging for water storage tanks, etc. If your independent home is located in a gated colony, the security system is likely to be arranged by the residents’ welfare association (RWA).
Nowadays, developers are offering mixed residential projects, consisting of flat house, as well as plotted developments, where the amenities and facilities are accessible to all owners at a small additional cost. To have the best of both the worlds, such plotted options are a great choice.
Flat vs house: Mortgage facility
In case of an independent house vs house, it is easier to take a home loan for buying a flat house than an independent house. Major banks usually offer pre-approved loans for residential projects. For independent homes, the lending process includes tight scrutiny of all property papers and the borrower’s credit history. Additionally, it may be difficult for a lender to perform the property valuation for an independent house. Consequently, banks provide only up to 70% of the plot’s value as loan. The remaining amount, including the stamp duty and registration charges, has to be arranged by the borrower. For an apartment, banks usually provide up to 90% of the property’s cost, as loan.
Flat vs house: Maintenance cost
All properties need constant maintenance and repair. So, in terms of maintenance cost, flat or house, which is better? In a flat house, the buyer has to bear monthly maintenance charges, depending on the property’s size. In case of an independent house meaning like a villa, the maintenance cost has to be borne by the owner and it is higher than what would be paid in an apartment. Moreover, in a residential complex, everyone pools in and therefore, the maintenance charges reduces drastically.
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Flats vs house: Saleability
There is no doubt that it takes more time to liquidate a property asset. When it comes to house or flat, an independent house is likely to take more time to sell than an apartment, due to its high value. Moreover, it also depends on the demand in the market where the property is located. As apartments are more in demand, owing their small ticket sizes, it is easier to sell a flat house than a bungalow. However, in tier-II cities where people still prefer independent houses, finding a buyer for an apartment, could be difficult.
Flat vs House: Buying cost
In the case of flats, generally, the contractors or the developer or the authorities of the property, take the responsibility of consulting lawyers and look into the legal rules and regulations for construction. This reduces the legal costs. On the other hand, owners of independent houses need to consult a lawyer on their own and look into the construction legalities, thereby increasing the costs.
Flat vs House: Insurance
When you are evaluating buying a flats vs houses note that the owners of a house need to pay a premium for their home insurance. The home insurance generally covers their entire house and provides financial coverage for any mishap. In the case of flats, the insurance for any damage to the flat or the entire complex, is undertaken by the main owner of the property, which can be the residents’ welfare association or the society, which gets the entire property insured. However, individuals can insure their personal belongings in a flat.
Flat vs House: Flexible décor and house plan
If you are very particular about the way your house should look and don’t want to follow the customised pattern, then an independent house will suit you more. Also, in a flat decisions like changing tiles, renovation etc. need permission of the society, which is not required in case of an independent house.
Flat vs House: Security
Flat or house which is better? Security is a big concern and an important point to consider while deciding which is better. While a flat comes with 24 x 7 security (covered in maintenance costs), a in case of an independent house, one has to take care of the security themselves.
Flat vs house: An under construction project
If you are looking at investing in a under construction flat or house, what would be better? In case of an under construction flat, all related legalities will be taken care by the developer. However, in case of an under construction independent house, you have to be involved in all stages including buying land, getting permissions etc.
What is better flat or house?
This will depend on the purpose of investment. A house may be better for end-users but will involve higher capital expenditure and will also offer greater returns. A flat offers limited customisation options but has a lower cost of acquisition and maintenance also and is easier to liquidate.
Is it safe to live in a flat or house?
This will depend on the security services available in the property. In a flat, the security arrangements are likely to be taken care of by the residents’ welfare association (RWA) and its expenses shared by all the members.
House vs flat: What should I buy for investment?
While land could offer better long-term capital appreciation, apartments can offer regular returns in the form of rent.
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