{"id":879,"date":"2021-07-10T13:37:13","date_gmt":"2021-07-10T13:37:13","guid":{"rendered":"https:\/\/www.homebazaar.com\/knowledge\/?p=879"},"modified":"2025-01-08T13:07:44","modified_gmt":"2025-01-08T13:07:44","slug":"under-construction-vs-ready-to-move-property-which-one-should-you-buy","status":"publish","type":"post","link":"https:\/\/www.homebazaar.com\/knowledge\/under-construction-vs-ready-to-move-property-which-one-should-you-buy\/","title":{"rendered":"Under-Construction Vs Ready To Move Property \u2013 Which One Should You Buy?"},"content":{"rendered":"

While buying a property you get two major options- you can either go for an under construction or a ready-to-move property.\u00a0<\/span><\/p>\n

If you know that the under-construction property is about waiting for some years before getting the possession. And ready to move property means a huge instant financial demand then that\u2019s not enough.\u00a0<\/span><\/p>\n

Because every single factor that makes a distinction between the under-construction and the Ready-to move Property decides what\u2019s best for you.\u00a0<\/span><\/p>\n

And the best way to make the distinction between under construction and ready to move property is by checking out the pros and cons.<\/span><\/p>\n

Moreover, understanding the general process such as home loans and the taxations is important to check the suitability of both.\u00a0<\/span><\/p>\n

Therefore, this article discusses the difference between under construction and ready to move properties along with the home loan, tax scenarios, and notable trends for both.\u00a0<\/span><\/p>\n

Buying Under-Construction Properties:<\/b><\/h2>\n

In under-construction properties, a buyer pays the amount to the builder in the various stages of construction. Initially, the booking charges are paid followed by the payments in multiple tranches as per the agreement with the builder or developer.\u00a0<\/span><\/p>\n

The under construction properties are the best know for their cost-effectiveness, payment flexibility, and better property price appreciation.\u00a0<\/span><\/p>\n

On the other hand, the challenges in the case of under construction properties could be waiting periods, discrepancies in the final construction, and taxes, etc. These are manageable with the careful consideration of the important factors.\u00a0<\/span><\/p>\n

\"Ready<\/p>\n

Advantages Of the Under-Construction Properties:\u00a0<\/b><\/h2>\n

Comparatively Lower Costs:<\/b>\u00a0<\/span><\/h3>\n

Generally, Under Construction property costs 10-15% less than ready-to-move-in properties. The difference between the costs for under construction and ready-to-move-in properties may go up to 30% in some cases for the same factors such as locality, project scale, and unit size, etc.\u00a0<\/span><\/p>\n

Moreover, it is easy to manage the finances as you get a considerable amount of time. Also, you get different options on the location of the unit within the building at the lower cost range.<\/span><\/p>\n

In under-construction type properties, you are expected to pay the amount in stages reducing the overall financial load. The EMIs on the other hand remains constant over the period of time against the increased income.<\/span><\/p>\n

Scope For Property Appreciation:\u00a0<\/b><\/h3>\n

In under-construction property buying, there is a considerable timeline between the buying stage and the actual possession of the property. Because of this, there are chances of good property price appreciation.\u00a0<\/span><\/p>\n

For better property price appreciation time period is not the only parameter. Different factors such as location, growth of the regions, economic activities, infrastructure projects, etc have a collective impact on the property price appreciation of the under-construction properties.\u00a0<\/span><\/p>\n

If all the factors are fairly positive, then the property price appreciation can be around 25-35% for a minimum three-year time frame.\u00a0<\/span><\/p>\n

Flexibility on the Payments:\u00a0<\/b><\/h3>\n

Buying a property in the under-construction phase allows you to pay in multiple stages. Many banks offer home loans in the disbursed form so that the interests are applied only on the amount issued in the respective stage of construction.\u00a0<\/span><\/p>\n

Generally, the stages of payment in the under-construction properties are:<\/span><\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t
Stage<\/th>Description<\/th>Payment Breakups
\n% of Total Amount<\/th>\n<\/tr>\n<\/thead>\n
Stage 1<\/td>Booking Charges<\/td> 10-20% <\/td>\n<\/tr>\n
Stage 2<\/td>Commencement of work<\/td> 10%<\/td>\n<\/tr>\n
Stage 3<\/td>Completion of The Plinth Level<\/td> 15%<\/td>\n<\/tr>\n
Stage 4<\/td>Completion of Floors<\/td> 3% After Each Floor<\/td>\n<\/tr>\n
Stage 5<\/td>Close To the Completion Phase<\/td> 5%<\/td>\n<\/tr>\n
Stage 6<\/td>Final Possession<\/td> 5%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

New Construction:<\/b><\/h3>\n

The age of the property is one of the chief factors that decide the ROI in the later stages. Buying under-construction properties gives you the new construction along with the other features at a reasonable cost. Also, there are no repairing and renovation costs involved saving a significant amount of money.\u00a0\u00a0<\/span><\/p>\n

In the future, if you decide to resale the property the age of the property doesn\u2019t become the pain point.\u00a0<\/span><\/p>\n

RERA Compliance:<\/b><\/h3>\n

All the under-construction projects come under the new RERA guidelines. This ensures compliance with the legal practices in the transactions.\u00a0<\/span><\/p>\n

Moreover, The advent of RERA streamlined the under-construction property buying and enforced the regulation to complete the project within the time. If the developer does fail to deliver the project on the date of possession in the agreement, the developer has to pay the amount paid along with the interests.<\/span><\/p>\n

However, the timeframe for the possession is usually decided by the developer during the initial phase of the deal. Buyers should take the decision by considering the time frame for the possession.\u00a0<\/span><\/p>\n

Special Offers & Discounts:\u00a0<\/b><\/h3>\n

Developers offer discounts and special offers to attract buyers for under-construction properties. Besides, there is always a scope for negotiating with the developers for the best deal. On the other hand, there are very few chances of getting discounts on the ready-to-move property.\u00a0<\/span><\/p>\n

\u00a0The best way to explore projects with the best discount offers is to get consultations from real estate advisers.<\/a><\/span><\/p>\n