Under-Construction Vs. Ready to Move in Home: Where to Invest?

Homebuyers often ask one main question: whether to purchase a house under construction or a ready to move in property.

While each one has its pros and cons, it’s imperative to dig deeper and understand what fits best to your requirements.

While buying a house under construction will be comparatively economical, it’s not readily available to be accommodated.

On the other hand, ready to move-in homes are ideal for end-users.

But, this is not the end. Read on to understand what factors should be kept in mind so that you make an informed decision.

Ready to move in Vs. under construction Homes

1. Cost 

Under construction: it’s apparent that the cost of a house under construction is lower than the one in the final stages. The value of the property escalates with its construction stage.

Ready to move in: the cost of readily available homes is on the higher end, but you get a developed social infrastructure, schools, hospitals, and more amenities in the vicinity. The cost difference could be anywhere from 20-30%.

2. Risk

Under construction: in some severe cases, the developers have failed to deliver the property on time, or have delayed the projects due to cash crunch or other reasons. 

To eliminate this risk, it’s always advisable to carry out detailed research on the developer.

Ready to move in: there is no such risk or loss of property involved in this case. Moreover, you can visit the property to check the structure and surroundings. 

Hence, the risk is low, and you can see the property before investing in it. Lastly, ready to move in homes are best if you’re the end-user.

3. GST implications

Under construction: GST of 5% is levied on the properties falling under affordable housing.

Ready to move in: these properties are free from the GST implication.

4. Return on investment

Under construction: the window between buying the property and getting the possession is usually longer; therefore, these types of properties have a reasonable rate on return. 

If you’re buying with the intention of selling or leasing eventually, it’ll yield high returns. 

Buying in the initial stages and selling during the completion time is a great way to gain capital appreciation.

Ready to move in: Unless you’re considering leasing the property, the investment return is higher on the house under construction. 

Moreover, as the project reaches its final stages of completion or is ready to move in, the prices inflate.

5. RERA compliance

Under construction: The states’ RERA mandates any property with Occupation Certification on 1 May 2017 to get registered. 

The under-construction properties fall in the confines of RERA and are required to carry out fair trade practices. 

Moreover, this means that buyers can learn more about the respective states’ RERA website and seek quick grievance redressal by the Appellate Tribunal formed under RERA.

Ready to move in: ready to move in units with the Occupancy certificate as on 1 May 2016 are not required to be included under RERA. 

Consequently, its promoters are not eligible to make any information about the property available online.

6. Possession

Under construction: one of the most significant drawbacks of under-construction properties is that you cannot guarantee the outcome. 

There are high chances of a discrepancy between the expected and the final product. However, to eliminate this discrepancy, it’s advisable to visit the site and note the ongoing construction regularly.

Ready to move in: Clearly, the most significant advantage of ready to move in properties is that you can have the home’s possession whenever you want. 

You do not have to go through the years of the waiting period to gain possession. 

All that’s required is to do your due diligence, pay the amount, and submit the mandatory documents. After that, the home is registered under your name and is ready to move in.

Conclusion

At the end of the day, it all boils down to your requirement of purchasing a property. If you’re looking to buying a home now to lease it eventually, then under construction properties are ideal. On the other hand, if you’re looking to upgrade your current home and move in with your family, then ready to move in is an ideal option. 

Reach out to our professional realtors at Buniyad, who will guide you and aid your decision to purchase a dream home.

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