Is buying a flat a good long term investment.

#RealEstateInvesting #flat #apartment

Why buying a flat for long term investment is not so profitable.

Lot of people believe that buying an apartment for long term investment is good. However, it is not as great a return as we want to believe.  

On an average, real estate is a long term investment considered by many. 

Now, lets look at the downside of buying an apartment

1. Apartment building will depreciate over time. While the land on which it is built will appreciate but apartment building will depreciate in value. This is mainly because as the time goes, the construction wear and tear will happen, the paint will get old despite it being painted once in few years so, the tiles will get broken and hard to replace since those tiles will no longer be available in the market, the chips will come off from walls etc.

2. Apartments will have small share of land compared to the land it is built on. An apartment will usually have low share of land (UDS: Undivided Land Share) compared to the sq ft it has built on. 

3. Up to 30% of apartment share will in common areas depending on the apartment building. Carpet area will typically be much smaller. 

4. Newer apartments will have more facilities compared to older apartments. Like these days, apartments are coming up with Car chargers sockets, better environment and green norms etc, Sheer wall technology vs brick walls etc

These are the top reasons why apartment usually appreciates lesser than the land surrounding it or even newer apartments nearby.