Are you considering investing in plots? In this guide, we will explain in detail why you should invest in plots and the benefits of buying agricultural land in India.
Investing in plots, also known as land or real estate investment, can be a fruitful and long-term strategy for growing your wealth.
Before making any important investment decision, you should know there are two types of plots- Residential plots and agricultural plots, each type of plot offers unique opportunities and challenges. Let’s dive into the topic and understand it in-depth.
Agricultural land vs Residential land
Residential land- Residential land, also known as residential property or residential real estate, refers to a specific type of real estate or land that is primarily designated for housing and related purposes.
Benefits of investing in a residential plot
Here are some of the benefits of investing in plots-
- Liquidity– Residential properties are generally more liquid than other forms of real estate investments, such as large commercial properties. The demand for homes and apartments remains consistently high, allowing for relatively quick sales when you decide to liquidate your investment.
- Increase in value within time– Residential land tends to appreciate in value over time, especially if it is located in desirable areas with good infrastructure, services, and access to essential amenities.
- Rental Income– One of the primary advantages of owning a residential plot is the potential for rental income. By constructing residential units such as houses, apartments, or townhouses, you can generate a steady stream of income through rent payments. This rental income can provide financial stability and serve as a passive source of earnings.
- Less Property Tax – Depending on your location and local regulations, there may be tax incentives associated with owning and investing in residential property. These tax benefits can help reduce your overall tax burden.
Considerations for Residential Plots
- Regulations and State Law – Check local regulations and state laws to understand what type of residential property can be built. Some areas have specific restrictions on the number of floors, land usage, and even architectural style.
- Infrastructure and Amenities- Access to basic amenities like water, electricity, and sewage systems is crucial for residential plots. Proximity to schools, hospitals, shopping centers, and public transport also adds value to the property.
- Market Demand- Research the demand for housing in the area. Understanding the preferences of potential buyers or renters can help you design a property that caters to the market needs, ensuring higher occupancy rates and better returns.
Agricultural Land- Agricultural land, often referred to as farmland or agricultural real estate, is a specific type of land primarily used for farming, cultivation of crops, and raising livestock. It’s an essential component of the agricultural industry and plays a vital role in providing food and raw materials for various products.
Benefits of buying agricultural land in India
- Tax Benefit- Agricultural land in India is exempted from certain taxes. As these lands in the rural area are not considered as capital asset, it is not subjected to income tax.
- Agricultural land values are rising / appreciation in land value– Agricultural land often appreciates in value over the years, especially in regions experiencing infrastructural development. The demand for land increases as urbanization expands, leading to higher land values and potential profits for investors.
- Potential in Agribusiness- Agricultural land ownership opens doors to agribusiness opportunities. One can establish agro-processing units, dairy farms, poultry farms, or other ventures.
- Government initiatives- The Indian government often launches initiatives and schemes to support agriculture and rural development. Investors may benefit from these programs, ranging from subsidies on agricultural inputs to funding for agribusiness ventures.
- Passive Income- These lands could be a good source of passive income. You can rent your land to neighbors for gardening, or rent to tenants, looking for farming or raising animals.
Common Mistakes to Avoid while buying agricultural land
✔️Verification – Before investing in agricultural land make sure it fulfills all the legal formalities. Verify its ownership details
✔️Soil check- Soil is an important component in agriculture. Check the soil quality, if you’re purchasing land for farming purposes.
✔️Documents- Check necessary documents like registry documents, and sales documents, and make sure you are purchasing from a verified seller. Check out the list of basic documents required to buy a plot.
If you’re facing any problems Contact Square Foot Investor today to take the first step towards securing your future through strategic real estate investments in India.
Frequently Asked Questions
Is it good to investing in plots?
Yes, it is good to invest in plots. As demand for land is rising and prices are continuously increasing.
Are NRIs eligible to invest in Indian real estate?
Yes, Non-Resident Indians (NRIs) can invest in Indian real estate, subject to certain conditions. It’s advisable to consult our experts for detailed guidance tailored to your NRI status.
Is it better to invest in residential or agricultural plots?
The choice between residential and agricultural plots depends on your goals. Residential plots offer steady appreciation and rental income, while agricultural plots can diversify your investment and offer tax benefits.