Looking to buy a residential plot? Here are things you should know

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Buying an apartment or a villa is a common practice. However, many buyers prefer to buy plots and build their own homes or as a pure investment. Buying a plot has many different angles compared to buying under-construction or ready-to-move homes.

There are issues such as availability of loan, title and registration issues that one has to understand before going in for a purchase of a plot of land. Here are some of the positives and negatives of buying plots and what you should keep in mind while making the decision.

Build home of own taste

If you buy a plot of land you can hire your own consultants and architects to construct a property that suits your desires and tastes. “Plotted developments offer owners the flexibility to build a house as per their tastes, preferences and time. Moreover, maintenance costs of such assets are almost negligible and property tax from plots is lower compared to residential properties,” Indrajit Siddhanta, Principal Partner and Head of Business Development, Square Yards, said.

Low maintenance

A plot does not require your attention if left unattended. “Maintenance costs of such assets are almost negligible and property tax from plots is lower compared to residential properties,” Siddhanta said.

Restricted loan options

Getting a loan for buying a plot may not be as easy as buying an apartment or villa. “One can borrow through a land loan for investing in residential land, though lending is very limited and is restricted to only specific types of land. If the land is allotted by a development authority, only then lenders will arrange a loan for you. Also, the land must be residential land and must not be situated in a village or industrial area. Besides, some banks come with conditions where they can ask you to start construction of the home within a few months of the purchase of the property,” Siddhanta said.

Location is important

Like in all property purchases, location is an important factor, whether you decide to build your own home or are planning to sell it later to make gains. Good infrastructure facilities and proximity to good schools and hospitals will provide good value to the land. The area should be well connected to the main localities of the city or town.

Do due diligence

Before you buy the plot there are a lot of background checks that you should do including checking whether the property is free of all encumbrances. “Do check on the built-up area of the plot, the topography, soil structure of the area and appreciative potential before purchasing a plot. Besides this, one must cross-check whether or not- the property is embroiled in litigation or other land-related issues, the name of the seller is correct and full right to sell the land lies within him or not. Lastly, check necessary approvals of the land from the Development Authority and the local body,” Siddhanta advised.

Take expert help

Since you may not be conversant with the laws and the regulations you should take the help of experts to do the fact-checking. “One must ensure that the seller has undisputed ownership of the land and demand an original title deed to verify the same. One can run a title search on the land registration website of the state government, and if needed consult a lawyer. Besides the title deed, make sure that the entire documentation process is transparent and original bills and tax receipts are furnished to you. Lastly, get the dimensions of the plot checked by a surveyor and also the FSI of the land,” Siddhanta said.