Home buying is a heavy investment decision, and while shortlisting a property, the dilemma of investing in an under-construction project or a ready flat definitely pops u in the mind of a buyer. While both the categories have their pros and cons, the under-construction projects allow a buyer to make payments on an easier schedule, and it is not heavy on pocket at once.
Let us delve into the merits of investing in an under-construction property.
Easier on the pocket
An under-construction property does not make a hole in the pocket of the buyer as much as a ready home does at the time of purchasing. If allied factors such as locality, property type, area of the premise and real estate developer are the same, a ready-to-move-in property will cost more than an under-construction property. In fact, the gap in final pricing can range from anywhere between 10 - 30 percent, which is a huge cost saving for the buyer.
Any property having an Occupation Certificate (OC) as of 1 May 2017 must be compulsorily registered under their States’ RERA authority. Therefore, under-construction projects compulsorily fall under the purview of RERA. Through this, they become liable to follow transparent and fair trade practices. Potential homebuyers can gather information regarding such properties on their concerned State’s RERA website. Aggrieved homebuyers can even seek a faster grievance redressal by the RERA Appellate Tribunal formed under Real Estate (Regulation and Development) Act.
Flexible payment schedules
If a homebuyer is zeroing in on an under-construction property, there is no immediate need of paying the entire amount in one go. Generally, the real estate builders offer you to pay the money in scheduled phases, in line with the construction stages and deposit the maximum remaining amount at the time of taking the possession. One can start paying the Equated Monthly Installments (EMIs) of that down payment deposited, but these EMIs are well within reach of the buyer, unlike a ready property where the entire amount is deposited at once.
Wider and better options
When a homebuyer shortlists an under-construction property, he/she gets a wider range of choices and better options to choose from. In normal times, new projects are launched periodically, and one project can be better in many aspects than the other one. Therefore, an under-construction property allows you to choose the location and the flat as per the buyer’s wishes and convenience.
Better Returns on Investment (ROI)
It is an established fact that buying an under-construction property is most likely to yield a higher return on investment. It happens due to an extended payment and construction window between the buying stage and delivery schedules. If the buyer sells the property close to the possession timeline, he stands a great chance of earning a handsome appreciation on the capital investment. In addition to this, there is another feature and advantage of buying an under-construction property. As the majority of these properties are developed at periphery and underdeveloped areas of the city, the probability of price appreciation with under-construction projects far better than the ready ones.
Under construction, properties offer a brand new construction to the homebuyer. When the investor is investing in a newly constructed property, he is assured of long shelf life. The homebuyers are relieved of worries related to repairing and renovation while moving into a new property. One can start living on the property as soon as they get possession. When you are spending a significant amount on a decision of a lifetime, there is no point in going for a property that is old or in resale. Generally, homebuyers prefer to invest in an under-construction property because they get a newly constructed house with all new features. Moreover, there are more amenities available at an affordable cost in an under-construction property.
In comparison to an under-construction property, it is too difficult to get a discount on a ready to shift property. The ready premise is a completely built house, and the buyer needs to pay the entire cost as per the real estate market and even more depending on the amenities provided in the project. However, if the homebuyer is going for an under-construction project, there are attractive discounts and concessions on offer, such as gold jewellery, modular kitchen, air conditioner, free car parking slot, among others. In an under-construction property, the buyer can also negotiate on the final price of the unit.
Conclusively, if arrangement of finance is an impediment and you want to make an investment, an under-construction property is the best bet.