Which One to Invest in? Villa vs. Apartment vs. Commercial Property

Should I go for an apartment or a villa? Should I look to invest in a commercial property? These are some of the questions that many of us juggle through when it comes to investing in real estate.

Investment in real estate is a highly significant decision, especially in India. Thereby, it is unavoidable that one must tread all the paths before deciding on what one option to opt for.

How to select between villa, apartment or a commercial property?

All the three serve different purposes and meanings, and all these have their own characteristics. Therefore it becomes crucial to weigh-in all the involved factors before deciding on which one suits you best. So, what are the factors that have to be kept in mind? We discuss below:

Purpose / Use

An apartment or villa is for residential purpose, while a commercial property is for business purpose or as an investment to get recurring returns. If you are looking for a new home for your family, want to shift to a better surrounding with your family, or just want to invest in a residential property to seek returns in the near future, then an apartment or villa is for you.

However, if you are satisfied where you are living and have no intention of having a second property as rental or else, then a commercial property could be the right options. If there is a surrounding where there is high probability of commercial growth in the near future then investing in a commercial property is sure to give you high returns in the future.

Residential (Villa or Apartment) Property vs. Commercial Property

Commercial property: 

  • For the rental purpose, a commercial property provides much better value than a residential one.
  • The lease for a commercial property is also usually longer, for up to many years.
  • A commercial property investment is also considered very stable.
  • If you are looking for re-sale value, then you should understand that commercial properties may not yield very higher percentage returns in the future, as the growth usually tends to be gradual.
  • The customization is also not much possible with a commercial property, as you have to abide by certain rules, size and functional specifications.

Residential Property:

  • Investing in a residential property can be done at a much lower entry ticket than a commercial one.
  • Lease process is also simpler than a commercial one.
  • For rental purpose, with a residential property you can’t expect to get higher returns compared to commercial.
  • The customization is also easily possible than a commercial property, more so in a villa.

Villa vs. Apartment

While we have discussed the investment scenarios between a residential and a commercial property, it is time to discuss that between the two segments of residential property – villa and apartment.

Apartment:

  • An Apartment is a highly affordable option, depending on the size can be much lower than a villa.
  • The property maintenance is low and easy, and ideal for a small family to live.
  • On the security aspect, owning an apartment is a highly secured option.
  • However land ownership is negligible and you also get limited privacy.
  • The customization is also not possible in an apartment.
  • Easy to put on rental and good rental returns.

Villa:

  • You would know that a villa is on the high-end when it comes to pricing.
  • You get own land ownership, have a luxury space to yourself, high privacy level and with no overcrowding.
  • You have to manage your own security.
  • It is ideal for large families or preferred by those having high earning sources.
  • Not easy or ideal for the rent purpose, and you also don’t get high rental yield.
  • You can get the property customized, depending on the specific property and conditions.

Apart from these factors, as an investor you also have to understand what will work best for you. Is there a specific area or region where you want to invest in? Weigh-in all the pros and cons before you take a final decision.

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