Ready-To-Move-In Or Under-Construction House: What To Buy?
Home buying is one of the most exciting yet tedious processes, as we often get confused how to go about it. Among many other things, buyers are often confused about buying an under-construction property or a ready-to-move-in home. Remember, the two above mentioned stages of a home have their own advantages and disadvantages.
Let's take a look at the pros and cons of both the options and what could be a better option for you:
Now-a-days most of the developers start marketing their projects at an early stage. This is done to sell as many houses as possible before the housing complex is built.
Here is why you should invest in an under-construction property:
Easy on pocket: Buying an under-construction home is cheaper when compared with the ready-to-move-in homes. Also, the payment process for under- construction homes is more convenient, as you start paying slowly at different stages.
Better returns: Under this category, you may get higher returns, as there is a good scope of price appreciation due to future development.
Options unlimited: Under this category, developers have plenty of options in terms with locations, prices, amenities and so on, as compared to the ready-to-move-in homes.
However, under-construction properties may involve some risks.
The wait: An under-construction project may miss completion deadline due to late approvals, increase in input costs and limited funds, etc. There have been cases where developers could not finish the project in a stipulated time because of cash crunch, increase in the cost of raw materials and interest rates. If there is delay in completion of the project, as a home buyer you would be incurring double loss. You would be paying home loan EMIs for a longer period of time along with paying rent.
Wrong delivery: Home buyers may end up getting something different from what had been promised in an under-construction project.
Ready-to-move-in property: With cases of projects getting delayed due to various reasons rising, more and more buyers are opting for ready-for-possession homes. Ready-to-move-properties offer several other advantage.
You buy what you see: When you buy a ready-to-move-in properties, you get what you see. You can also check with your neighbours what kind of facilities your housing society offers, something not possible in case of an under-construction-property.
Instant relief from paying rent: A lot of people who are paying very high rent or travelling very far for their work tend to buy ready-to-move-in houses because they want immediate relief from these.
Challenges while opting for ready-to-move-in house:
Heavy on pocket: Ready to move in homes are relatively costlier than under construction homes. In some cases, they may cost 20-25 per cent higher than under-construction homes, depending on the locality and market condition. If you go for ready to move in flats, you lose out on the option of lower EMIs applicable in case of under construction homes, as banks release payments on the basis of phase wise completion of a project. Also, the price appreciation in case of ready-to-move-in properties is generally lower than under-construction properties. Further, all the payment has to be made upfront and all at one time for a ready-to-move-in property.
Lots of paper work: There is a lot of legal work and documentation required in case of ready-to-move-in properties.
No quality control: When you go for a ready-to-move-in home, there is little you know about the quality of raw materials used for the construction, etc.