Planning to buy a home? The first thing that pops up in your mind is whether to go for a ready-to-move-in property or a buy in under-construction properties in India. Well, the choice would basically depend on the state of your finances and requirement. The homebuyers get stuck with the various benefits and disadvantages that are innately linked to the two types. Their brain tends to go out-of-order if ready-to-move-in or under-construction where to invest?
Ready-to-move-in or under-construction
Well, both the categories have their own advantages and shortcomings. To put in simple words, the hazard of a ready to move in property in India is nearly nil. Furthermore, you get the chance to verify every fact and fiction; fittings before you purchase it, or rather make the payment. However, it is important to keep in mind that the quality of construction is hard to foretell when it comes to real estate.
The Indian real estate market has a number of options for both ready-to-move and under-construction projects. However, it is difficult for anyone to say which option is better. Understanding the purpose of the purchase, budget, need and multiple other factors are involved in the decision. Most importantly, each has its pros and cons.
Ready-to-move-in or Under-construction Pros and Cons
Let’s explain a few benefits of buying under construction property
Under-Construction Property Pros
1. Plethora of choices
You get a number of preferences to choose from. Choice can be done considering the unit size, direction of apartment, floor rise and so on. Besides you have the bargaining power. You can negotiate with the builder for a cut-price.
2. High returns
The cost of under-construction properties is reasonably lower than ready-to-move-in. At some point of the construction stage, the prices tend to rise. This happens as the construction progresses. Consequently, there are high chances that the project will witness a value rise.
3. Flexi payment plans
Most importantly, the best part of under-construction property is ‘affordability’. Furthermore, to make the payment method uncomplicated, developers have introduced a number of payment plans like time linked plan, construction linked plan or down payment plan.
Let’s explain a few disadvantages of buying an under-construction-property
Under Construction Property Cons
1. High risk
As you choose to invest in an under-construction property you should keep in mind that there are chances of delay in possession. This happens primarily because of land clash and imperfect permissions from authorities. Besides, at times the builder runs out of money or there is some outlaw by the government. Furthermore, at times builder takes the amount for one project and then instead of progressing the work invest the fund in other development.
2. You may not get what you see
The most important concern with under-construction property is that you never get what you are assured as there is no end product to start with. You may just see a sample flat that is well-furnished with modish amenities and specifications. But when you finally get the possession of your flat, it is not similar to the sample flat. To avoid this, you must always check amenities and specifications that would be a part of the delivered flat.
3. Service Tax
It is important to keep in mind that when you decide to buy an under-construction property it comes with the legal responsibility of service tax. Service tax is charged on properties without the Completion Certificate at the time of purchasing.
Pros Of Investing In Ready-To-Move-In Property
1. You get what you see
While you choose to buy a ready-to-move-in property you actually get what you see. Hence chances of getting fooled by the developer are almost zero. You can check its maintenance and interiors. Consequently, it becomes easier for the buyer to check if the project specifications match the standards promised.
2. Easy to verify legal status
Since the property is already completed, you as a buyer can with no trouble confirm the Occupancy Certificate, Completion Certificate, land titles and so on.
3. Have idea of the neighbourhood
The locality plays a significant role in deciding if one should invest in the property. This is an essential thing to consider before investing in property. For a ready-to-move in one the locality is already developed. Hence it becomes easier to understand the neighbourhood and decide whether the area is good for you or not.
4. No service tax
In case you have the completion certificate or occupation certificate from the concerned Municipal Corporation, then you do not have to pay VAT or Service tax.
5. Ease of selling
It is not that easy to sell an under-construction property. Besides if possession is delayed or it’s involved in litigation things get more complicated. Most importantly, in some cases, the developers do not give consent to transfer of property until the project is complete.
Cons Of Investing In Ready-To-Move-In Property
1. More legal work and documentation
Generally, when you invest in a ready-to-move-in property you need to take care of a lot of legal work. Most importantly, you need to do some crucial paperwork for property transfer and ownership. Since payment is done in one shot you need to go through all the documentation work carefully.
2. Limits on modification
If you invest in ready-to-move-in property, the structure and interior is already planned. Consequently, there is little scope of modifications. However, minor internal modifications can be managed. In case you need to completely revamp it means investing a good amount.
3. High Property Cost
A ready-to-move-in property costs higher as compared to an under-construction property. The cost difference could be anywhere between 20-30%. Besides, the buyer has to pay the total amount in one chance. In addition to this there are registration charges, stamp duty, and other miscellaneous expenses as well.
4. Buyers loose on choice
For ready-to-move-in flats buyers have limited options. Most importantly, buyers generally don’t get a chance to choose the floor of their preference, flat direction etc. Because of high demand, buyers have to make quick decisions.
To Sum up
You can opt for either a ready-to-move-in or an under-construction property. However, according to experts, it’s always sensible to buy a ready-to-move-in property if your finances permit. If you are looking for immediate possession, it is better to go for a ready-to-move-in property. If you are looking for a return on investment, it would be a wise decision to choose an under-construction property. Understand your purpose, budget and invest. Whatever you decide always consider buying from a reputed builder.
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