December 09, 2023

Advantages of investing in an under-construction property

Buying your dream home is one of the most critical decisions of your life and for many, a once-in-a-lifetime move. There are many factors to be considered before taking the plunge, one of those being whether to go in for a ready-to-move-in (RTMI) home or invest in an under-construction (UC) property.

A sizeable proportion of home-seekers are nowadays prepared to wait for their dream home even if it is under construction. One of the reasons for this preference is that UC properties in India usually come at a lower cost and has great potential to appreciate. Investors in particular, can reap the benefits of this price differential between a UC and an RTMI property, while also being able to leverage the flexi payment options realtors offer.

There are a clutch of advantages working in favour of UC homes, like the flexibility to choose from a plethora of preferred locations, your favourite floor/level and amenities, etc, which all add up to propel your property value. You can also get your apartment customized to suit your specific needs and ideas, which is difficult and sometimes not possible at all to do in an RTMI home. Besides, with RERA compliance now absolutely mandatory, there are very little chances of construction delay.

So, what are the advantages of investing in a UC property?

# Lower prices: The price differential between an RTMI property and a UC one can vary within a band of 10 to 30% if the location, developer, size, etc are the same. Hence, waiting a few months or a year doesn’t really hurt, with the price gap making the wait worth the while. No wonder more and more house-hunters are opting for UC properties.

# Greater appreciation: The construction stage is always the best time to buy into a property, because of the guaranteed appreciation in valuation. As the project nears completion, the ambient infrastructure also organically improves, thus raising the value of your UC home. RTMI properties usually don’t see such a level of value appreciation.

# Flexi payment options: For an under-construction property, you can only pay a token amount as down payment and the rest across comfortably spaced-out instalments till the construction is completed. However, in the case of a ready property, you won’t have that flexibility and will be asked to fork out the whole amount at one go or within a short interval from the signing of the deal.

# Brand-new home: Investing in a UC property means you can move into a brand-new home once the construction is complete and you get the keys. A shiny new property has its own allure and advantages, as opposed to an RTMI home which could be old construction and hence subject to wear and tear. If you have to invest in and carry out repairs immediately after you have moved into your new home, that sheer joy of owning a brand-new entity is somewhat lost.

# Exciting offers: Developers usually offer a variety of lucrative schemes for UC properties, including layered payment plans, freebies and add-ons. However, once the flat/house is complete and ready to move in, these offers are not on the table, more often than not.

# Secure against delays: Earlier, home buyers deemed it safer to buy an RTMI property to guard against possession delays. Now, with the RERA Act in place, customers are insulated against any time overrun, with clearly spelt-out time penalties in the legislation. Of course, you must check if the developer has a RERA number. Most reputed realtors have this. Customers can approach the RERA-established Appellate Tribunal for a prompt resolution of their grievances.

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