Pros & Cons Of Ready-To-Move-In Property And Under-Construction Property

Which is better to buy- Ready-to-move-in or Under Construction?

Are you preparing to buy property and can't make up your mind whether to go for a ready-to-move-in flat or an under-construction apartment?   

The Indian real estate market is flooded with new, under-construction projects and ready-to-move-in flats. But before understanding the purpose of purchase, it would be wrong to say any one of the options is better than the other as each has its pros and cons.

Also Read: 5 Tips To Help You Choose Between Ready To Move In And Under Construction Properties

To make your buying procedure simple, we have analyzed the pros and cons of both ready-to-move-in property and under-construction property in India:

Pros of investing in under-construction property

Plethora of choices: Investing in an under-construction property offers you a number of preferences to choose from. Selection can be done on the basis of unit size, floor rise, direction of apartment, etc.

High returns: The prices of under-construction properties are comparatively lower than ready-to-move-in properties. During construction stage, the prices get an upward shift and vary as the construction progresses. So, there are high chances that the project will witness price appreciation.

Flexi payment plans: The best part of under-construction property is 'affordability'. To make the payment procedure easy, developers have introduced several payment plans like construction linked plan, time linked plan or down payment plan.

Cons of investing in under construction property

High risk: The chances of delay in possession are very high during construction stage. This happens mainly because of land dispute and incomplete permissions from authorities. Sometimes, it might be possible that the builder runs out of money or there is some ban by the government.

You may not get what you see: The major issue with under-construction property is that you never get what you are promised as there is no end product to start with. The builder will show you the sample flat which is well-furnished with modish amenities and specifications. But when you get possession of your flat, it is not similar to sample flat. To avoid this, you must always check amenities and specifications that would be a part of the delivered flat.

No tax benefit: Buying an under-construction property comes with the liability of service tax. Service tax is levied on properties which do not have Completion Certificate at the time of purchasing.

Also Read: Why Ready-To-Move-In Property Is A Better Option Right Now

Pros of investing in ready-to-move-in property

You get what you see: In ready-to-move-in property you will get what you see and chances of getting duped by the developer is almost nil. You can see every aspects of the property, including its maintenance and interiors. One can easily judge whether the project specifications match the standards promised.

Easy to check legal status: Since the property is already completed, one can easily check Occupancy Certificate, Completion Certificate and land titles, etc.

No service tax: No need to pay service tax if you are investing in ready-to-move-in property

Have a feel of the neighborhood: Before buying you can check the occupants of the area, the community and decide accordingly whether the area is good for you or not.

Cons of investing in ready-to-move-in property

No flexible payment plans: There is no flexibility in payment and you need to pay at one go, including down payment, registration charges, stamp duty, etc.

More legal work and documentation: Generally, ready-to-move-in properties require a lot of legal work and paper work for property transfer and ownership.

Inflated cost: When a project is under construction, high price appreciation is expected. After some years of completion of the project, the price of the flat appreciates slowly or is greatly inflated.

Limits on modification: If you invest in ready-to-move-in property, there is little scope of modifications. Minor internal modifications can be done easily but you need more money to completely refurbish a flat.

Buyers loose on choice: Buyers have limited options for ready-to-move-in flats and cannot select flats on the basis of floors, view, etc. Because of high demand, buyers have to decide quickly.

Overview of ready-to-move-in flats vs under-construction flats

First, you have to understand your purpose of buying a flat -- whether you are an investor, an end-user or an end-user looking for return on investment.

From an investor's perspective, investing in under-construction property is more lucrative. During the construction stage, the capital value is at its lowest but increases as construction progresses.  

If you are an end-user, you can opt for both ready-to-move-in and under-construction property. If you are looking for immediate possession, opt for ready-to-move-in property. If you are an end-user and looking for return on investment (ROI), investing in under-construction property makes more sense as you will get high returns on investment.

Do share your experiences with us in the comment box below.

Also Read: Ready-To-Move-In Or Under-Construction House: What To Buy?