Under-Construction Property has always appealed to homebuyers. This is because the costs involved to make a purchase are lesser than ready-to-move properties. However, under-construction properties are dicey forms of investment.
In case of an under-construction property, thorough understandings of the real estate market, along with in-depth knowledge about the most recent trends in the industry are key factors a buyer needs to master. A buyer’s focus is to make a profitable investment. We advise buyers to have a separate budget for a self-governing legal report and to visit the property personally. Doing so, will give a rational feel and help to decide if the property is worth investment or not.
Reasons to consider investing in under-construction properties
A lot of individuals / families prefer buying a well-furnished home a lot safer than investing in an under construction property. However, the second option can have many benefits. Before investing, have a closer look at some vital reasons why under-construction properties are worthy investing:
- As compared to ready-to-move properties, under-construction houses are 20-40% cheaper
- A more suitable loan can be reimbursed given the fact that there will be less spending on an unfinished property
- There is ample time to plan finances and set up a suitable loan repayment plan
- With under construction properties the documentation is handled by the construction company or a developer. A lots of cash is saved on taxes and administrative fees
- Under-construction properties are unfinished and redecoration hassles don’t exist, and individuals / families have the liberty to design it however they like Individuals / families need to make a sensible decision before investing. Under-construction properties yield huge returns and it is always advisable to consult a property tax advisor. Knowledgeable advisors offer the best advice; they know which under-construction property has potential and which don’t.
Know everything there is to know about risks
In the same manner as conventional real estate, under-construction properties come with a certain degree of risk. We advise to check the following to make sure the correct investment is made:
- Approved building plans
- All permits and permissions must be in place
- Construction must be in progress and have at least 2 completed slabs
- Development agreement and allotment letter
- Certificate of commencement for the work
- No stagnation signs
- Occupancy and completion certificate
- Property must not be a heritage
- Property must not be under dispute or litigation
Be careful because investing in a property that’s under a housing loan, the entire construction process can get delayed. This means that the final payment might get postponed too, which might cause noteworthy loses and high interest rates. For resale of an under-construction property, the seller must have income tax clearance; this is important when registering the property.
On the other hand, investing in under-construction properties can have benefits. When closing the deal, it might be ideal to negotiate the final price, as well as have a professional advisor who helps in making a sensible decision.