When people own a residential plot and want to monetize it, the most significant decision is whether they want to sell the plot directly or first build floors on it and then sell each floor separately. The primary objective here is to maximize monetization in the best possible manner.
It is a tricky decision; thus, to help the plot owners reach the optimum rationale; down below we have curated a list of factors that play a crucial role to decide whether selling a plot directly will generate maximum profit or building floors and selling each of them separately will be more profitable to plot owners.
First factor:
Financial analysis: The first and foremost important step is to do a financial analysis for the plot. Plot owners need to calculate how much they will make when they sell the plot directly and how much they will make through selling the floors.
So, let’s say you have a plot of 240 square yards in a good colony of Gurgaon. The price of the plot is Rs. 2 lacs/square yards. So, the plot owners will make a total of Rs. 4 crore and 80 lacs.
And, if you decide to make floors on it; the selling price for each floor will be 2 crore and 10 lacs. So, if you decide to sell the floors; the total price will be 8 crore and 40 lacs. Now, let’s say the construction cost was 3 crore. So the final amount you will get from selling floors will be 5 crores 40 lacs.
However, if you were to sell the plot directly, you would get 4 crore and 80 lacs. Thus, by selling floors you make an extra profit of 60 lacs. So, you should decide whether Rs 60 lacs is worth the hassle and the risk of building and selling floors. Additionally, this is the mathematical calculation for both scenarios. However, there are more factors that plot owners should look at in this journey. Let's have a look at these factors.
Second factor:
White money: When plot owners sell the plot; the chances of getting the complete value in white is less for the owners. However, if you sell the floors; it is more likely that you will get the full money in white.
Third factor:
Assess the chances of appreciation: The next step in this journey is to assess the chances of appreciation of the floors. Now, the plot owners need to assess the real estate market and decode the chances of an increase in the price of the building. This will help them analyze how optimally they can monetize the land.
Fourth factor:
Keep one floor to yourself: If a plot owner wishes to build floors; they can sell the three floors and keep one for themselves. This way they are saved from the hassle of looking for another house for themselves somewhere else.
Fifth factor:
How urgent is your need for money: This will be the next deciding factor. If you believe, your financial stability would be strengthened if you sell the plot right away, then you wouldn’t go for building floors. However, if you feel your financial health allows you some time then building floors on the plot will give you better returns in the future.
Sixth factor:
How easily can you build and sell floors: The next and the last factor in this journey is to analyze how easily you can build and sell the floors. Because if building the floors doesn’t seem an easy task for you then you would go for selling the plot right away. However, if you hire a professional builder such as Prithu. The entire process can be easier for you. See the below details to understand how Prithu will help you in this journey.
For plot owners, who decide they want to build and sell the floors; we have a hassle-free solution for you. Most importantly, it is a unique solution that only Prithu offers in the market in Delhi and the NCR region.
Prithu Homes offers a turnkey hassle-free way of home construction. Our expert team will design, construct, seek approvals, do the interiors and do the neighborhood management as well. And, apart from these services, we have other exclusive services for the clients who want to build floors and sell them to monetize:
Prithu's team will advise you on specifications and prices based on the market research and you'll take the final decision. We'll do the marketing for the floors; including collateral, listing on portals, website page, email, WhatsApp campaign, and broker activation. We'll also do sales management for you, which includes meeting clients, showing the site, query handling, closing, documentation, and relationship management post-sales.
So, this way, not just home building is hassle-free through Prithu, but selling the floors at the best market prices is also hassle-free. Lastly and most importantly, floors built by Prithu get premium in the market - in the speed of sale or price or both. Conclusively, based on the above-listed factors; plot owners should decide which way they want to opt. The correct decision will vary from person to person depending on their individual needs.