Buying an under-construction or a ready-to-move property largely depends on the needs of a buyer. The one who is looking for a house with urgent requirement to move in, cannot sustain with an under-construction property. While those with the perspective of investment in real estate finds under-construction property as more profitable affair.
If you strongly believe the adage – “A bird in hand is better than two in a bush” then ready-to-move property is meant for you. With the growing instances of defaults and delay in the real estate sector, chances are high that the developer will not render the possession or may not be able to complete the construction within the time stipulated.
As an emerging sector, real estate has been curbed by some of unprofessional builders who start their projects without adequate financial and other resources resulting in delay of projects and loosing buyer’s confidence. In case the property is associated with any kind of litigation, chances are high for the further delay in project completion although the disbursement are generally linked with the completion of construction in case of under-construction property.
Ready to move in property with complete registered Papers also give an advantage to owner to borrow any kind of loan from the Bank by submitting the documents as a collateral to them.
Once the construction gets completed, EMI payment gets started and the home loan gets disbursed at the same time. In case there is some delay in the possession, a buyer may end up paying EMI while bearing the expenses of rentals as the possession of the house is yet to be transferred. Under such cases, a buyer may require to cancel the property booking due to financial constraints of monthly rent and EMI simultaneously.
Alternatively, when a buyer opts for ready-to-move apartments, he can save on the part of rentals or can rent out his apartment to earn a supplement source for EMI payment. High rates of Interest and higher risks are involved with under-construction property. Although default factor becomes minimal when it comes to reputed builders with good credibility still, lot of risk involves in giving away the possession of property with delay in time.
The rules say “Profitability is always proportional to the risk undertaken”. So, under-construction property being a risky version allures the investors due to its higher profitable aspects. No doubt, the prices of under-construction properties are lesser than a ready-to-move apartment. The buyers for under-construction venture may experience price stagnation for the first few years till the proper amenities get developed around the area. But, later on they may enjoy the higher price appreciation as compared to ready-to-move apartments.
At the same time market trends depict various risks like delay in possession or default by seller like allotting the same under-construction property to more than one buyer involves huge risk in such projects. Secondly the under-construction property is not as liquid as ready to move-in apartments. In case of sale, you shall be required the consent from builder as well as his commission from the sale proceeds.
While ready-to-move property ensures an instant gratification of your money, under construction property assured higher returns in long term.