In the real estate market, there has always been a debate about the best option for investment, a plot or a file. Both options have their unique pros and cons. But, it largely depends on the choice and financial condition of the buyer to which one chooses. I will explain the key differences between a plot and a file to make it easy for you to decide on investment. Let’s read the blog.
What is a Plot?
A plot is an on-ground piece of land allocated by a legitimate owner and open for possession. It is a touchable asset with a specific boundary and location.
What is a File?
It is a claim document specifying a future land entitlement in a specific residential society. It does not have a well-defined location or boundary.
Difference Between a Plot and a File
I have outlined the major differences between a plot and a file. You can decide based on these points that either a plot is the best investment for you or a file.
A Tangible Asset
A plot is a tangible asset you can visit and touch. But a plot file is not a touchable asset. It is just a documented property that does not exist in reality.
Ease of Liquidity
You can easily convert a ready-to-possession plot with a good location into cash, but not a file. It will take more time and effort.
Stability
A plot is a stable property that has appreciated over the years. On the other hand, a file is a volatile commodity whose prices can easily decrease or increase with time.
Upfront Investment
A file needs a low upfront investment. For example, you can buy a plot file with a payment of just 10 % of the total value of a plot. The initial cost for a ready plot is always high. You may need to pay the full amount of the plot at the time of purchase.
Impact of Speculations
Market speculations have a higher impact on the file than the plot. Real estate marketing companies and societies sell files with big promises and less practical work. While the plot needs actual development work on the site for its sale.
Payment of Tax
You do not need to pay a tax on a file. However, a plot needs different kinds of property taxes on a plot.
Matter of Dependency
When you buy a plot, you become a legitimate owner of this property and do not depend on anyone. In the case of a file, you do not have ownership rights and become dependent on the developer for a return on your investment.
Difference of Profitability
A file gives more profits than a plot because you buy a file in the initial phases of a residential society. So, it appreciates with a huge capital gain after some time.
The extent of Risk Factors
It is easy to commit fraud in the file because the supply of files is abundant, and you can not check the locality and physical presence of property mentioned in the file.
On the other hand, due to the location and on-ground availability of the plot, there are fewer chances of scams. Therefore, investment in the file is risky compared to a plot.
Conclusion
Whether you opt for a plot or file. It depends on your future goals, financial condition, market understanding, and other factors. Please remember that a good or bad real estate investment can lead you financially up or down over the next years. Therefore, take the advice of a real estate consultant before investing.
Contact for Real Estate Investment Consultancy
For consultancy to invest in the real estate market of Pakistan and UAE, you can reach out to us via :
Our Email address: Info@propertynaama.com
Oversees Clients (For Call Only):
UAN: +92 332 7777888
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