Land Or Home - Making The Decision


The Economic recession has a global impact on economies. Investors are in a dilemma where to invest their precious money in this scenario of uncertainty. With land and apartment prices facing a major downfall, investing in them can bring in long-term gains.

So, which is a better investment: land or an apartment? Both have their positive points and drawbacks. Land is thought to be a better investment, as nowadays the availability of land has gone down in and around cities and thus following the price-demand curve with decrease in supply the price ought to increase thus making investment in land more profitable. The value of land is the only thing that has a predicted price appreciation. The reason why apartments are not having an appreciation in prices is due to the added depreciation cost of infrastructure included. This lowers its market value.

Moreover, with townships and societies coming up all over there is a rapid increase in the number of apartments and this increase in supply causes a decline in apartment prices. With land there is no maintenance cost involved, which is an added cost in apartments.

Nevertheless, land buy is not a foolproof investment; it has its own risks involved. Land Encroachment is a major factor, which can deprive you of your hard earned money; moreover, buying land does not provide a continuous return on investment. Buying land asks for a huge investment, which everybody cannot afford. Buying land is not an option for short-term investment, as land gives a one time return and longer the duration more the revenue on the investment.

Investing in home can also be a good option. Nowadays, more and more people are working in MNC's away from home and accommodation is their primary need, and if you own an apartment in such a place, you can generate a recurring source of revenue. Homes also require less investment as compared to land. If you are wishing to pay back in installments, investing in home is a better option as bank rates on home loans are low. The most important aspect of investing in home is you can put it on rent, which gives you a constant source of income and can be a helping hand for you in these testing times of recession.

Home, though they show depreciation in long term, are good for short-term investments. The depreciation cost is minimal during the first five years and it is advised to sell it after a park period of five to six years, as it is when you can maximize your revenues. With home, the added advantage is that it can be rented, which gives a regular returns on your investment.

Both land and home provide good investment opportunities. In their own way, both have their added advantages and disadvantages. With land and home prices at its lowest due to economic recession, it gives the middle and the working class an opportunity to invest their hard-earned money and reap good revenues from it.