5 Tips To Help You Choose between Ready To Move In And Under Construction Properties

If you are planning to buy a home, one of the first choices to make is whether to go for a ready to move in property or a flat in under construction properties in India. The choice would largely depend on the state and stage of your finances and needs.

Both categories of properties have their own advantages and disadvantages. The risk of a ready to move in property in India is almost nil and you can cross check every fact and fiction, fitting and faucet before you purchase it. Quality of construction is tough to predict when it comes to real estate.

An under construction property might come at a better (lower) price with the difference between such a property and any ready to move in property being almost 25 per cent.

So, which one should you go for?

Here are a few aspects of your finances and lifestyle that can help you make a choice between ready to move in property and under construction property:

1. Financial preparedness

Do you have a large chunk of savings and you are all set to make an investment? If the answer is 'yes', go for a ready to move in property in India. On the other hand, if you have discovered a good location and a good property but you might need a few years to work on your finances to become 'real estate ready', go for under construction properties in India. You can stress yourself financially to make the down payment, secure a loan and take a few years to save. The property will be ready by then and the EMIs will start.  

2. Need for property

If you are living in a rented apartment and looking for a property to buy, a ready-to-move in home might serve the purpose and help you save on rents, though it might cost you a little more. Waiting for under construction properties in India while paying rent is frustrating -- as experienced by many home buyers caught in project delays.  

3. Location & property

If your investment is in an area that is all set to develop, it would be wiser to go for it when the ongoing project in India is being constructed. Utilities, accessibility, stores, schools and other amenities will catch up as the property is being built, making it an easy ride for you when you move in later. If you move into the property before the area is fully developed, you might have to live through the tough phase where travel is required for every small purchase and bad access roads. In the meantime, the property rates might pick up, increasing the capital value of the investment.

4. Tax breaks

When you buy a ready to move in property, according to Section 24 and Section 80C of the Income Tax Act, the principal of Rs 1.5 lakh paid is deducted from income. The interest paid too is eligible for deduction up to Rs. 2  lakh. But, when you buy an under construction property, you can claim tax deductions  only after the property is handed over to you, in five installments over the next five financial years. 

(The writer has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)