Apartment or Independent house – Here we make your home buying decision easy.

Home – a necessity for life, has become a priority for all to own a house as earliest possible. Most of the people, especially working class wish to have their own house to have a secure life in case of any financial crunch. Most of the people are at the stake of money earned with hard efforts while buying a house. Often, an accepted norm for a house purchase is selecting a property at a wonderful location. Selecting a better location would give better appreciation on the investment. While some opt for apartments, others prefer independent houses. Usually, properties having sky-high rates in metros compel most homebuyers to look at apartments as their preferred choice. These come slightly cheaper than independent property which could be in the form of a villa or an assortment of floors built on a plot. While it is common knowledge that the latter comes at a price, there are some marked differences between the two.

We explain here some of these differences to help you to make your buying decision easily at the time of buying.

Amenities comes at a cost – While an apartment property comes with added values, such as security, enough parking spaces, power back-up, water systems and fire safety mechanism in place, an independent property needs extra effort for setting up of these services. This would also include an extra cost. It is estimated that one needs to spend 2-3 per cent of the total property value on these amenities around an independent villa property. This would include setting up of a small power back-up in the form of an inverter or a generator set, and your own water mechanism. Security will still remain a constraint. In case your villa property is located in a colony of such villas, the inhabitants can form a Residents’ Welfare Association (RWA). The RWA can then look after security and other such issues.

On the contrary, in an apartment society, the developer provides all these in advance for the first 2 to 3 years. Later, the management of services is taken over by the RWA.

Mortgage – In case you are buying the property by taking a home loan, it is easier to get the loan for an apartment than an independent property. Lending banks often prepare a list of sanctioned projects where a buyer can easily get his loan approved. However, banks sanction loans for independent properties only after strict scrutiny of borrowers. The lending is difficult in the case of independent properties also because of the share of unaccounted cash component. Moreover, it is difficult to ascertain the value of an independent house.

In case you plan to buy a plot, be aware of the fact that banks in India provide only 60-70 per cent of the total plot value. You will have to arrange the rest of the amount, including that for the stamp duty and registration charges. However, banks do provide construction loan over and above this amount.

If buying an under-construction property – If you choose to buy a property which is under construction, there are some challenges which might be faced. However, the problems reduce drastically when you invest in an apartment project. In case you plan to buy a plot and then build the house property on it, it would be a long, cumbersome and tiring task at hand to construct the property. However, here you would have the advantage of building the property within a specified amount of time. In comparison, in an apartment project, you will be at the developer’s mercy — whether or not he wishes to complete the project on time. Cash crunch, poor economic scenario, rising cost of raw materials and labour, and poor sales sometimes hit developers’ revenues, leading to construction delays.

After sales/ possession

Maintenance cost – After buying, work does not end here. Once you start living in your own house, the property needs constant efforts for maintenance, cleanliness and construction & repair. However, it has been observed that the cost of maintaining an independent house is more than that required for an apartment property, as the maintenance is taken care by the society’s RWA in an apartment project. Because of the pooled resources in a residential complex, the cost of services reduces drastically. These services take less time than that required in an independent property.

Resale – Among all the asset classes, property as an asset class takes more time to resell. And the task may become difficult if it is an independent property. Industry estimates suggest that apartments are now more in demand. Even Tier-II cities are witnessing such developments. Developers are now bringing apartment projects with a mix of plotted developments. If you decide to sell your property at a later stage, it would be easier to sell an apartment. Within apartments, two-bedroom and three-bedroom apartments are the most in demand.

Thus, if you decide to buy property, do your groundwork on these parameters. While you may choose one option, always consider that there is no specified time for property investment. So do not wait for it.