August 16 2018
In my previous article, I had written about the pros and cons of buying a ready to move apartment, and today, this article will cover about under construction property.
Under construction property
In recent times, under construction projects are more in demand as people consider it as an ideal option for buying a property. As soon as a builder or developer announces a new housing project in newspaper, televisions or in any other media, the respective brokers and the PRs of that real estate company start sharing information about it in TV, radios and on social media sites, like Facebook, Google +, and on the company’s website. This helps people to know about it, and if someone is interested, they can invest in such properties. Mostly, the builder tries to sell all the units before the start of construction. Generally, if the builder is a reputed one, then at least 75% and sometimes even the whole project is sold, even before a single brick is laid. But, even under construction homes have their own pros and cons.
Advantages of under construction property:Plentiful choice: Choices and availability are more in under construction projects, when compared to ready to move homes. A home buyer has the freedom to choose the locality, the amenities, the proximity from his workplace and school, among others. He can even suggest changes at the time of construction as per his requirement and need. He can come and check the construction at regular intervals.
Economical: They are cheaper and worth the money as there is a significant price difference to the extent of 20 to 40%.Good returns: Investing in an under-construction property give better returns, as by the time the house is constructed and the possession is given to the home buyer the price of the house is increased drastically. Sometimes even the location attributes to the home price and it may be even more than expected.Disadvantages of buying a under construction homeRisk factor is high: Sometimes it may happen that builders do not finish the project in the stipulated time. Reasons can be many, like, financial problem, increased cost of raw material, increased interest rates on loan, among others.The buyer may be duped: Even though, the project is finished on time, the buyers do not get what had been promised by the developer. Sometimes, all the amenities promised by the developer in the brochure may not be ready to use, or it may get delayed or may not be the way it is promised. In such instances the homebuyers feel very disappointed.Location does not develop: the market outlook may change with time, no one can anticipate that, places and localities that were sure to be developed, sometimes do not flourish much. For example, Samshabad in Hyderabad, even though it has Rajiv Gandhi International Airport nearby, and was expecting many engineering colleges, hospitals to crop up, but due to the recession in 2008, nothing seem to work out for this area and has not been in demand much since then.Important points to note when investing in under construction property.
Before signing the builders agreement, focus on the penalty clausesThe final choice, which one is better? Under construction or ready to moveActually, the final choice is on the home buyers, who have to invest. Mostly, his choice will depend on his financial condition, location choice and amenities and even the construction quality. If a home buyer does not give much importance to location, then a reputed project will be a logical decision. But, if a buyer has good funds to support currently, but is not sure how the cash flow going to be in the future, then he can go ahead for ready to move home in a good locality.Back