Owning a home has been the quintessential Indian dream for decades. It comes with the sense of security, pride, and status that has in part fuelled India’s growth and economy. For most Indians, buying a home is preceded by years of careful financial planning, saving, and forecasting. But one major consideration that you need to make at the outset is deciding whether you want to build an independent house or buy an apartment. This decision has far-reaching implications on planning, costs, and resale value apart from the ownership experience.
Today we will try and break down the factors that affect this decision and how you should approach the process.
Customization
Probably the most important consideration before making the choice is how much of the home is “you”. A new apartment can be imagined as a shell that you must fill with your persona and soul. But remember you are limited by the design of your unit, space, floor plan etc. Building your own home takes away these limitations, you are the master planner and designer from the beginning and there is so much more personal satisfaction.
Want that extra balcony that overlooks your garden? Done! A little vegetable patch in that garden? Done! That’s the freedom that comes with building your house. Most independent homes are constructed to be occupied personally and rarely to be rented out. This means that you are molding a space that houses your family, each member with personal likes and dislikes and you can easily take all of this into consideration. The final product is one that you are happy with not one that you settle for. And there is always scope for remodeling and expansion in the future.
Costs
Along with the list of your needs and wants, a set budget is another thing that helps you narrow down your options. Your budget plays a major part in deciding the locality, square footage and amenities that you want to have and can have in your planned home. It might come as a surprise to many that independent houses work out cheaper in terms of cost and can help you stick to your budget. Due to high economic activities, localities closer to the city centers are always expensive. So you invariably tend to get less even if you are ready to pay more. For the same budget that fetched you a small apartment in the city, you might be able to get a sprawling independent house in the suburbs. Also, building a house allows you to control costs right from the stage of the structure while ensuring quality control. However, one thing to consider here is the proximity to schools, places of work, community centers, etc. and the travel time and modes of transport available from the suburban areas to these places. Other costs that you need to bear in mind like the maintenance cost and the resale value.
Privacy
Privacy is a must-have for any aspiring home buyer. Your home is your comfort zone and where you are yourself. So typically you wouldn’t want it to have an overlap with the lives of your neighbors. With shared walls, amenities, and common areas, apartments can offer only so much privacy. This is where independent houses seal the deal. You have the luxury of having your space all to yourself without any intrusion. Even within small plots, privacy can be achieved by carefully planning your space and leaving yard areas for you to sit back and relax.
Loan Sanctions
This part is a bit tricky, but we will try and help you navigate it. Typically apartment projects have big backers, this can be the real estate developers, property management companies, designer brands, etc. This ecosystem takes on the liability of promoting, marketing, and selling apartment units, thereby finding sellers who are “financially sound” and can afford the apartment unit. Since the buyer has the validation of this eco-system little scrutiny or hassle exists in sanctioning loans for customers. Banks too enjoy the benefits of scale from working exclusively with the backers to sanction multiple loans which means more business for these banks and hence have an incentive to smoothen the process. But you typically get a loan with a fixed structure and low interests. They are rarely open to restructuring your loan to match your financial plans.
In independent house projects, the piece of land that you are building on by itself becomes the security backing and the loan amount that you can raise is proportional to the estimated value of the land. While most banks make conservative estimates these should still cover your construction costs entirely. If so, then you are trying to finance both the land and the construction you will need additional backing. But a strong financial history makes things much easier with things such as personal credit rating etc(CIBIL score). Prefer banks that you have banked with for many years and have built strong relationships with. Your bank has most of your financial history and will be more than happy to work with you to sanction loans quickly with minimum hassle.
Amenities
Apartments have a plethora of shared amenities that have become a major selling point today. Parking, health clubs, recreation rooms, play areas, power backup, security, and even supermarkets have become standard in apartment projects. These amenities may make or break your decision while choosing between apartment projects. While these are perceived as features that are being offered for your benefit, remember you are paying for all of it! Carefully evaluate what you are most likely to use and do some math to see how much of your home costs are going towards covering these amenities. Only if you are absolutely sure that it’s worth it, make your move.
Independent homes are built to your needs from the start. So you can easily repurpose an additional bedroom for a home gym or office. Want a swimming pool but don’t have the plot area? You can consider a rooftop pool or a nifty little lap pool. Smart house owners these days are building for future capacity and using a basement plus multi-floor approach structurally. The basement is used as a car park and additional space can be used for any function from a gym to storage spaces. If you still want all the works, consider buying land in plotted developments that offer all these shared amenities along with the freedom to construct your home on your own private land.
Security & Safety
This is a factor that is worth looking into closely. First, consider the locality that you are looking to buy or build a house in. Do some research on how safe the region is etc. Convince yourself that this is a place where you will have peace of mind regarding your family’s safety. If the locale is one with a lot of commercial activity, proximity to law enforcement, and has a good reputation then half your job is done.
Apartments have an advantage – they are within a common compound with multiple families in the surrounding with activity for most of the day. That itself is a passive security feature. Apartment complexes deploy extensive security features such as guards, CCTV systems, biometric locks, alarms, etc. Additional safety features in apartments include firefighting systems and 24/7 medical practitioners for emergencies.
Independent homes require dedicated security systems if you are building a house in an independent plot that is not a part of a plotted community. But with advances in home security systems, this has become a fairly easy task. These solutions include wireless security cameras, motion sensors, smart locks, etc which are connected via the internet and can give you live updates even when you are away at work or on vacation. Some residential colonies have begun pooling resources with contributions from individual homeowners to employ full-time security services dedicated to streets, blocks, or sectors.
Resale Value
Every home is an investment. You realize the benefit of this investment when you decide to sell your home at a future date. Needless to say, the value of your property should have appreciated significantly, after accounting for inflation, interest on loans availed, etc for it to be deemed a valuable investment. Apartments and independent homes both have historically proven to be assets that have great resale values. However independent homes have a slight edge.
When you own an apartment you own what is called an “undivided share” of the land on which the building stands. Now you can imagine that this piece of land is small considering it is distributed among all those who own a unit in the same complex. So the real value of the property is within the apartment unit i.e. square footage of your home. While apartment prices skyrocket in the initial stages they plateau after a point. This owing in part to the fact the house is aging, there is wear and tear, is going out of fashion. Since apartments have lesser flexibility in terms of renovation and redesign there is only so much you can do to make your homes attractive for the next homeowner. Also, all new homeowners prefer a brand new home, psychologically it seems more fulfilling.
Independent homes have the advantage here. The land is part of the offering as a whole and land prices have always been appreciated in the long term. The real estate business thrives on this phenomenon. The increase in the value of the land by itself yields great returns. The home structure with careful maintenance and upkeep can fetch additional value too. Moreover, buyers have the autonomy to remodel the existing building to their preferences and can greatly save on construction costs. All these factors put together make building an independent home a better investment hands down.
Possession Time
Apartment projects have been notoriously infamous for late handover and delivery. The primary reason is slow progress during the construction and finishing stages. Developers and contractors underestimate schedules to make the delivery times look attractive to the buyer. For buyers, a shorter handover time is beneficial because most homeowners are renters and the faster they can move into their own homes the earlier they stop paying rent. Also, homeowners are paying the mortgage on the property even before handover happens, post-registration.
While building an independent home also is prone to delays and deviations from schedules these are much more within your control and anticipated early on. Constructing your own home also allows you to speed up or pace your progress according to the flow of funds etc. If you are currently renting and are looking for a quick move-in, you can talk to your contractor to complete sections of the home to occupy early on and continue construction after you have moved in.
Maintenance
Both apartments and independent homes are equally easy to maintain but independent homes have more utilities, fixtures, and systems that are dedicated to the singular homeowner. This means that costs are completely borne by the individual owner. But considering that independent homes are more quality controlled at the time of construction you can be confident that you won’t incur maintenance costs early on in homeownership. Apartment buildings are large-scale undertakings and it is difficult to maintain standards at every nook and corner. There is bound to be a lapse of supervision or quality control during construction leading to problems for dwellers later on. Unfortunately, this may be localized to a few units and not project-wide and could largely depend on your luck. Since apartment projects are a game of scale, the material is purchased in bulk and leveraged against costs. This also means that quality control may be compromised to cut corners and stay within budget. When you build your own home however you have a much more granular view of everything including quality and execution ensuring that the lifetime of the building and its features are longer and your maintenance costs are lower.
Social Life
This is purely a personal choice and less of an advantage/disadvantage question. You can choose to build a social life and be an active part of a residential community irrespective of where you live. While apartments encourage building community and make it easier given the common touchpoints, having an independent home allows you to do this within your comfort zone. You can choose to mingle with neighbors, and residents of your colony and build a community or live independently. Apartments though have a certain expectation to remain an active member of the residents association, take part in community events, etc. As mentioned it becomes a purely subjective question. That said it makes sense to do all of this in some measure as it is important to be a part of a communities support system and this is a two-way street. You never really know when you might need a helping hand or how you can help someone in dire need.
Reputation
Land dealings have had a bad reputation in recent times. This has been a major roadblock for aspiring homeowners looking to buy land to construct their dream homes. With the recent foray of big property developers into the plotted development business, this has become less of a hassle. Bigger brands bring compliance, good business practices and transparent dealings to the transaction. They additionally have the experience and resources to help with bureaucratic processes during registration etc. Some of these developers also undertake the construction of your home on the plots that you purchase, most others construct independent homes and villas in standard and luxurious designs to sell as ready-made units.
While apartments too have become a safe bet and it pays to deal with reputed builders and developers. This can ensure that the quality of construction, finishing, fixtures, services, and amenities are all of the highest quality as their reputation is at stake. Irrespective of the type of the house, independent or apartment, it is important to do a background check on the seller or promoter and do due diligence on the paperwork, approvals, and licenses. A seller is legally bound to transparency and any inhibition to provide clean documents or sale records should be eyed with extreme caution.
Conclusion
The choice between an apartment and an individual home can depend on many of the factors that have been covered above and those beyond them. But it is important to weigh all of them into your buying decision. Making an informed choice with the input of your family, friends and financial advisors is key to making the right one. Account for as much as you can, give them priorities, and weights, and be ready to make some compromises. After all, this is a balancing act but one with long-term implications.
If you are looking to build your dream home and are grappling with the decision to buy an apartment or build an independent home feel free to consult with the experts at 100Pillars. We can help and guide you through the process and even provide all the services required in building your dream home.
