Ready vs Under-Construction Properties: Which Is Right for You?
Once you have decided to buy a new home, the next big question is the selection between under construction and ready to move in. In both these, you get numerous options as per your budget. But it is confusing to choose any one because each of them has their own set of pros and cons. This is a tough decision to make in today’s real estate market. This is why you need to first know the disadvantages and Advantages of purchasing an under-construction property and ready-to-move projects.
For the readers and potential buyers, Commonfloor has created this informative guide. This guide will let them know how to decide by understanding the pros and cons of both these house-buying choices.
What is an under-construction property?
Properties that are being built are referred to as under-construction properties. These properties are currently in the process of construction. In this type of property, the builders sell these units before it is fully constructed. This gives the home buyers flexibility to customize or make changes in the homes.
What are ready-to-move homes?
So, what is ready-to-move meaning?Ready-to-move-in property is a fully constructed home in which you can shift anytime. The buyers cannot make any customization because these are already completed units. Those who want immediate occupancy choose this property.
Advantages of purchasing an under-construction property
Low costs
Under-construction properties are 20% to 30% more affordable than ready-to-move-in ones because they will be ready in the next few years. So, these properties come with budget-friendly price tags. Along with this, developers attract potential buyers by giving them offers such as festival offers, discounts, and so on.
Under construction home loan tax benefits
Confused about a loan on under-construction property? One thing that you must know- yes, there’s a tax benefit on home loans for under-construction properties before possession.
Flexible payment options
The ready property requires payment at once or within a given period (short period). You will get significant financial flexibility with a property that is still under construction. In this property, buyers can even make a small deposit and then pay the remaining amount over time.
Follows RERA
Properties that are under construction will inevitably fall under RERA. So, the builder and the projects need to abide by ethical business practices. On the RERA site of the state, it is easy for the buyers to get information about the property’s possession, and many other details.
Better price appreciation
In the case of under-construction property, you will get the benefit of a higher rate of price appreciation. The cost of a property increases as the construction process moves forward. The property’s value also rises during construction because of local infrastructure upgrades. So, it makes sense to buy real estate when the property is under construction.
New beginning new home
After completion of the home, you move into a brand-new home where you get the benefit of recent features available. Ready to move in flats could be in an old building also which sometimes makes the experience unpleasant.
Disadvantages of an under-construction property
We will now discuss some of the disadvantages of an under-construction property that buyers should be aware of while investing in them. Whenever you are investing in under-construction properties in big cities such as Bangalore, Pune, and Chennai, keep these pointers in mind.
Delayed possession by the builder
With under-construction houses, there is a possibility of delayed possession which is one of the biggest disadvantages that individuals face. The project delay could be because of any reasons such as delay in clearances from authorities and lack of money. So, this is problematic and frustrating for those who want to shift to their new home on any specific date.
Risk of cancellation of the project
This is a major con of under-construction projects as some developers may cancel projects completely. Though this is a rare scenario but can happen. If this happens, buyers will face major financial loss.
Additional or hidden costs
There can be additional expenses, such as parking or maintenance fees when you buy an under-construction home.
Sudden change in the real estate market
If there are any changes in the real estate market, it will impact the value of your house that is still under development. If this happens, it will become difficult for the buyer to rent or sell the property.
Advantages of a ready-to-move-in property
Offers benefits immediate occupancy
What is the meaning of ready possession? With ready-to-move properties, there won’t be any delay, cancellation, or waiting time. After buying the unit, you will get immediate occupancy so that you can shift conveniently.
No hassles of construction
Construction can be discomforting for many because of dust, noise, and ongoing construction work. As the name suggests, ready-to-move properties are already constructed ones and you don’t have to make any construction in it.
Easy to inspect the home physically
This type of property is already built so the buyers can easily visit and inspect the house physically. This will give them an idea about the locality, structure of the rooms and many other things.
Easy to resale
One advantage of ready-to-move property is that it will be easier to sell them in the future. Most buyers prefer immediate occupancy so this will result in a higher price for the house.
Transparency in the deal
Ready-to-move-in homes come with quality assurance and transparency. In this type of property, the builders are accountable for transparency.
EMI loan option
The EMI option for the home loan for under-construction property starts after the completion of the project. But, the ready-to-move property gives you the opportunity for EMI right after you buy it.
Disadvantages of a ready-to-move property
Let’s now have a look at some of the crucial disadvantages of a ready-to-move property. Knowing these cons of ready flats will help you make an informed decision.
Higher cost of property
Buying a property that is ready to occupy will cost you more than buying a small construction house. The difference in cost of both these properties will be between 20% and 30%.
Absence of RERA conformity
The property that is old with occupancy certificates as of May 1, 2016, is not covered by RERA. So, buyers won’t get details about the property on the RERA site of that specific state.
Construction quality not known
For a property that is under construction, it is easy to know about the materials used and the strength of the foundations. But, you cannot do these with ready-to-move projects.
A Comparison between ready-to-move projects and Under-construction property
| Parameter | Ready-to-move-in property | Under-construction property |
| Discount and offers | No offer or discount since it’s ready to move into an apartment, | Builders provide various discounts and freebies |
| Ease of selling | Easily sell ready-to-move-in properties. | Challenging to sell an under-construction property due to late possession |
| EMIs | Buyers can pay EMIs on the home loan | EMI starts after the completion of the construction of the property. |
| Age of property | The age factor causes a negative factor if the property has not been occupied for several years. | Age of property of not a concern in under-construction projects |
| Payment | Buyers must have ready finances. | Buyers will have more time to make payments because of the different construction stages of completion. |
| Property costs | It’s expensive as physical infrastructure is already developed. | Relatively cheaper |
| GST | Not applicable to a ready-to-move-in property | For under-construction, GST is 1% for affordable housing units and 5%. For non-affordable projects. |
Conclusion
Buying properties that are ready to move and are under construction in India has pros and cons of their own. So, the buyers need to keep considerations such as project delays, RERA conformity, and legal issues. Thus, before making a final choice, it’s critical to balance the advantages and disadvantages of each property.
