Advantages & Disadvantages of Under-Construction Property

Home Loan Rates 2017 465 views

When we start exploring the property for purchase the fist thing which comes to our mind is under-construction-property or ready-to-move-in property. Which is the right choice? Both the properties have some advantages and disadvantages. But buying an under-construction property is good with the purpose of investment as you will get a good property within low budget. It is not really simple to make this tough decision. In such kind of situation, it becomes more necessary to make a learned decision. You should not make this decision in a hurry or in confustion, rather make a decision based on facts, and calculation.

There are many real estate agencies and firms which introduce various residential complexes and units every years. Some of the market biggies such as Wave infrastructure, Godrej infrastructure and real estate, Cosmic group, MMR, Punj Lloyd, Unity Infraprojects, etc. These are some leading names in the infrastructure and real estate industry. These companies launch different projects in real estate meeting the demands and requirements of the people. These companies showcase the project of the under-construction properties and ask the customers to book or buy the flats, apartments in these under-construction sites. However, these under-construction properties are comparetively cheaper and offers bigger area in the given price as compared to ready-to-move-in properties. Let's take a close view at the advantages and disadvantages of the under-construction property.

Disadvantages of buying under-construction property

Not meeting the timelines of projects: This is one of the most common issue related to under construction projects. In most the case, the project got delayed due to various reasons and in all this situation the buyers face the consequences. Generally, the builders projected maximum 2 years timeline to complete the project. But in maximum cases the project got delayed for more two, three or five years.

Must Read  Is home loan overdraft facility a good option?

Disputes related to site and construction: No builder will ever tell you about any disputes regarding the construction or site at the time of selling you the unit. You got a shock when your property got stuck because of all such disputes and the project got delayed for years and years.

Increased cost of property: This is another common problem faced by the people who book under-construction property. If the project got delayed for even two years, the builder ask for increased cost for the property. It is a kind of burden on you as you were expected a certain amount to be paid once you got the possession of the property, but because of the delay in the construction you have to bear the increase cost of the property.

False projection & promises: This is one of the most common and biggest issue with under-construction properties. These builders make end-number of promised to the customers related to infrastructure and facilities within the complex, but in most of the cases you don't receive what you have been promised. Some builder make promises about different facilities such as swimming pool, well maintained parks, Municipal Corporation Water supply, but all these and much more are just false promises and never met.

Compromise with quality: When the builder showcase you the sample house, it is generally built with all possible facilities and with the best quality products. Over the years you build an expectation of getting the same quality of work done within your house, but when you receive the actual house you find that it is much different from the promised one. At times, the builders don't use good material in construction and even use low quality door and windows, cheap quality sockets and switches are used. They use all possible ways to save the money and reduce the cost of construction and finishing of the house.

Must Read  Do I Qualify for a Second Home Loan? Know Here

Loss in income tax claims: You can claim the income tax benefits once you get the possession of the property. You can't claim the tax benefits of the under-construction property. In case, if the project got delayed for 2-3 years more, then it might be that you will even miss the income tax benefits linked with your under-construction period. As if you claim those too after getting the possession, the upper cap of claim will remain same as Rs. 1,50,000 lakhs per annum.

Advantages of buying under-construction property

Make payment with ease: As you are buying an under-construction property, so there is not urgent need of paying the whole amount in one go. Generally, these builders and construction firms ask you to deposit the money in phases and deposit the maximum amount at the time of possession. You can start paying the EMIs of that down payment be it 10% or 20% of the whole amount, but these EMIs are within your reach.

Wider and better options: When you book an under-construction property, you get wider choices and more options to select from. Every other day these builders launch a new project at different a different location. So you can choose allocation and even the floor of your future flat as per your wishes and convenience.

Price appreciation: This is another feature and advantage of buying an under-construction property. As most of these properties are developed at the out-skirts and underdeveloped areas, so the chances of price appreciation with under-construction projects is higher.

Must Read  Would I be eligible for a home loan?

More constructed area and better facilities: These builders offer you great deal in terms of constructed area and facilities. If you are buying an apartment or 3-4 BHK these builder will offer you various inhouse and other facilities related to re-creation and all within the society campus. Even the covered area of these houses is more as compared to the covered area of ready-to-move in property in the same budget.