Ready to move in or under construction property?


3 questions to ask yourself before choosing a ready to move in or under construction property

If you are reading this, you are perhaps ready to make the most important investment of your life.

No, we aren’t talking about getting married!!

Humour aside, if you are considering buying a house, you’ve come to the right place. It’s an important decision – one that requires a lot of research and consideration. One of the questions you should be asking yourself – in a market that’s spoilt for choice, is it a better option to pickup a ready to move in property, or opt for something that’s still under construction?

Before we dive in to that, let’s take a look at 3 questions you must ask yourself before you buy any property:

  1. Is it a good financial investment?

Factors to consider here would be the investment and the payment plans as well as the future value of the property. 

  1. Can I trust the seller/ builder?

Here you must evaluate the quality of construction, clarity in documentation and also the likelihood of delays in possession.

  1. How convenient is it for me to buy?

Can you choose the materials/walls/tiles to personalize the home? What is the estimated time in which you’ll be able to move in? How soon will the paperwork be done? Etc. are some things to consider.

How do ready to move in vs. under construction properties weigh in on these parameters?

Under construction properties

For under construction houses, the initial investment is considerably lower – a great plus point when it comes to taking a major financial step. While opting for under construction properties you also get more choice in terms of location, floor, design etc. This freedom to customise can be a plus, giving you more flexibility to exercise personal choices. Even in the long term the under construction option gives you a win since you can expect higher returns if you are planning to sell the property in a few years’ time.

The disadvantage of this option is the chance of default or delays in projects at the builder’s end. Delays and even abandoned projects have seen an alarming rise in recent years – mainly due to financial or legal issues a builder may face. Nonetheless, getting stuck with a delayed project can have massive financial implications for a buyer. Delayed possession means a financial outflow in terms of EMIs, and rent – if you are a first time house buyer. Apart from the monetary concerns, in case you have had the misfortune of picking a non-established builder, your finished house may look nothing like what was promised.

Ready to move in properties

The name says it all; being ready to move into is what ticks the biggest box. There is no waiting, no delays, and no defaults. This means you save on rental expense as well as interest. Also, even if you yourself do not move in, there is always the rental income that you can bank on. And guess what – no surprises! You get exactly what you paid for.

If you are choosing a ready to move in home, you may be able to save a bundle on taxes. The benefit of Income Tax redemption on EMI is applicable only after possession of property. Service Tax and VAT are also imposed in the case of under construction houses which is not so in the case of ready to move in houses. In fact, these properties are even exempt from the 12% GST that would otherwise increase the tax burden.

The primary downside of ready to move-in properties would be the down payments that make it the more expensive proposition. And you may have to spend more if you are looking to personalize it.

Parameter Under construction Ready to move in
Is it a good financial investment? Down payment Lower Higher
Tax benefit Lower Higher
Overall financial outflow Higher Lower
Can I trust the seller/ builder? Risk of delay Higher None
Documentation Could be in process and needs more vigilance Ready and less scrutiny needed
How convenient is it for me to buy? Personalisation Possible Not possible without additional investment
Time to possession Higher Immediate

Finally, it’s your choice

You do need to keep in mind that the comparison between the two options has to be done at par, basic factors being the same, like neighbourhood, location, size etc. At the end of the day it really boils down to your situation and needs. The availability of funds, possession timeline and your individual risk appetite are what will play a major role in your decision-making.

Whatever property you choose to pick up, evaluate it carefully on parameters that matter the most to you. If you want immediate possession, and are okay with paying a substantial down payment, ready to move in properties would suit you just fine. If you can wait for possession, but don’t want to shell out a lot of money in one go, then choose under construction properties. But make sure you choose a good builder – that will reduce the risks of delays and abandonment. And before buying do the necessary due diligence. Or just simplify your buying decision with Zaasna. Click here to start the search for your dream home.

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