People generally prefer a ready-to-move-in home if they can afford it. And those wanting a better value-for-money deal opt for under-construction houses. But that’s not all the differences there is to them. There are a few more to them.
Let’s find out all the advantages and disadvantages of ready and under-construction property through this article. This will indeed help you decide which one works best for you.
Advantages of purchasing an under-construction property:
It’s pocket friendly:
Buying an under-construction property is often a more pocket-friendly option compared to purchasing a ready-to-move home. Assuming the location, amenities, property size, and builder are the same, a ready-to-move house tends to come with a higher price tag than an under-construction one. The pricing difference between the two options can range from 10% to 30%, depending on various factors
You get higher returns:
An under-construction property investment can fetch you a higher return than one that is ready to move in. Since it is going to take – on average – 5 to 6 years for completion and subsequent possession, there is ample time and opportunity for the property’s value to appreciate. Who knows how handsome a return you might get on your initial investment?
Advantages of a ready-to-move-in property
The possession is immediate:
The biggest USP and advantage of a Ready to Move in Home is… that it is ready to move in! You pay the money, do the documentation, and the property is yours for possession. There is no nonsense of bleeding hard-earned money on both rent and EMI together.
You get what you are promised:
Shocked to see the balcony smaller than what was promised earlier? These shocks will not be waiting for you if you opt for an already complete home unit. You’ll get what you see, agree to, and pay for. Simple and straight. Besides, you have the advantage of personally inspecting the finished home unit before agreeing to purchase it.
Free from GST burden:
A ready-to-move-in property is exempt from the ambit of GST, unlike those under construction. You will have to shell out up to 5% GST on the purchase of under-construction properties. With buyers looking to save each and every penny in these harder times, it is sure to hurt.
Disadvantages of an under-construction property
The Risk is Higher:
Time and again you see instances of delayed or even abandoned construction projects by builders. And that makes you skeptical, and rightly so. Many buyers have suffered due to investing in such ill-fated projects. Curse developers all you want but there are several reasons a developer is forced to shelve a project like insufficient funding, escalated costs of building materials, increasing lending rates, and so on.
So if you are more of a Fixed-Deposit guy rather than a Mutual-fund one, one who prefers safe investment over prolific but risky one… opt for the ready-to-move-in property.
Discrepancies in the final product/layout/features:
Yes, now there is the protection of RERA. But there are still many loopholes a builder can resort to.
One of the most common grievances associated with under-construction properties is not getting what was advertised and mutually agreed upon. Chances are you might get lesser usable area than promised, fewer amenities than advertised, and a less-desired layout than agreed.
Disadvantages of a ready-to-move-in property
Acquiring a ready-to-move property does come with the disadvantage of a higher price tag as compared to an ongoing construction project. Since builders provide the finished product without any wait time, they do charge a premium for such properties.
It might not look brand new:
Sometimes, a completed home unit may not be the brand-new home you are craving for. It’s pretty much possible the property was listed for sale for a long time. And any carelessness in maintenance and you will easily encounter problems like seepage, deteriorated walls, broken fixtures, dirty washroom, and corroded iron apparatus, among other potential issues. Whereas you are far more likely to be handed over a brand new home in case of an under-construction home project.
It might lack the safety net of RERA:
RERA is a huge safety net all property buyers feel safe under. But a ready-to-move-in property might not have this safety net provided that it received its Occupation Certificate (OC) before May 1, 2016. Buying a non-RERA property can open a can of worms you’ll like to avoid even in your dreams. So if it’s a finished home you are purchasing, make sure it is RERA certified.
Just so you know, According to RERA regulations, a project doesn’t need RERA certification if its OC was issued pre-May 1, 2016.