Are you thinking about purchasing real estate? Get informed about under-construction and ready-to-move-in properties before making a choice that meets all your requirements.
Homebuyers and investors have many choices when searching for their ideal property, including under-construction and ready-to-move-in properties. Each option presents its own set of benefits and drawbacks that should help guide a wise decision process.
Investment property purchases are complex decisions, so all factors must be carefully considered before making a choice. Both under-construction properties and ready-to-move-in ones offer advantages and drawbacks. By carefully considering these elements, you can identify which option best meets your needs and preferences.
Here, we explore both categories to assist your informed decision.
Under-construction properties refer to real estate projects still underway or being completed, usually at lower prices compared to ready-to-move-in properties. Buyers usually purchase under-construction properties during early development stages at reduced rates. Completion could range anywhere between several months to years, depending on project complexity and size. Thus, buyers typically must wait until construction has concluded before moving in or making use of their purchase.
On the other hand, ready-to-move-in properties are those already completed and available for immediate occupancy or use. These fully constructed properties often include all amenities and infrastructure necessary for primary occupation or usage - perfect for buyers wanting immediate possession! However, due to this added convenience and decreased risk for buyers, these may cost more.
Now that you are clear about both aspects, let's assess their pros and cons to make the decision wisely.
Lower Initial Investment Requirement: One of the primary advantages of purchasing under-construction properties is their lower initial investment requirement. Developers frequently offer attractive pre-launch prices, discounts and flexible payment plans designed to entice prospective buyers. This allows individuals to purchase properties at a lower cost than available ready-to-move-in homes.
Customizability Options: Under-construction properties allow buyers the freedom to personalize their home according to their tastes, choosing a layout, fixtures, finishes and other design features to reflect their lifestyle. This level of personalization simply isn't possible with ready-move-in properties.
Potential Appreciation: Under-construction properties have the potential for greater appreciation than ready-to-move-in homes. This is due to infrastructure development taking place nearby and their value likely increasing, potentially yielding significant capital gains over time for any buyer.
Delayed Possession: One of the primary risks in purchasing an under-construction property is delayed possession. Construction projects often face challenges related to regulatory matters, labor shortages or financial constraints, which cause construction projects to delay. These delays often create inconvenience and frustration among buyers who were hoping to move in at specific dates and times.
Uncertainty and Risks: Investing in under-construction property carries with it certain levels of uncertainty and risks, such as developers possibly not finishing as scheduled or failing to deliver promised quality standards. For this reason, buyers need to carefully research potential developers to reduce these risks as much as possible.
Immediate Rental Income Loss: Buyers who invest in an under-construction property need to wait until its completion to generate rental income. It is an unfortunate reality for individuals looking for investment properties with immediate returns.
Grade B Builder Hurdle: We all know how properties developed by Grade A developers benefit from hassle-free financial options. But, if your property is being constructed by Grade B developers, then it might face several challenges in terms of financial assistance from all institutions.
Immediate Possession: One of the major advantages of ready-to-move-in properties is immediate possession for buyers. There's no waiting period or construction delays, which allows homeowners to move in as soon as they purchase one of these homes.
Rental Income Potential: Investment properties that offer immediate rental potential can provide investors with an excellent way to generate rental income. Once purchased, these homes can be quickly rented out to create an ongoing stream of cash flow, even adding relief to the EMI payable if applicable.
No Construction-Related Hassles: When purchasing an already completed property, buying will remove much of the stress related to construction. No need for dealing with contractors and architects as everything you need for moving in already exists and makes your buying experience much smoother.
Established Neighborhood and Amenities: Ready-to-move-in properties typically feature well-established neighborhoods with ample amenities. This includes schools, hospitals, shopping centers and recreational facilities that make living there convenient and foster a sense of community for homeowners.
Higher Initial Investment: Ready-to-move-in properties typically command higher initial investments compared to under-construction properties. This necessitates larger upfront payments from buyers to purchase these homes.
Limited Customization Options: Buyers who opt for ready-to-move-in properties typically have few customization options available to them. You may have to accept certain features or layouts that don't meet the preferences or certain specific criteria.
Older Infrastructure and Facilities: Ready-to-move-in properties may feature older infrastructure and facilities compared with newly constructed properties. This leads to higher maintenance costs as well as renovation or upgrade needs shortly.
Limited Appreciating Potential: Properties that are ready-to-move-in may offer less in terms of appreciation than under-construction homes since the appreciation of the micro-market can be further saturated compared to an upcoming one. Their values may not increase as rapidly over time, leading to lower returns for investors.
So, Bengaluru's residential real estate market has undergone tremendous change over the last decade due to rapid urbanization and population growth that led to property rates increasing significantly and development projects being undertaken rapidly. Since its humble origins, it has evolved into an international city featuring iconic landmarks. Trends driven by economic influences and technological advancements also influence market prices of residential real estate; prices depend on location, with central CBD areas commanding higher costs due to limited land availability, and while we move further in the radius away from the CBD, there are notably lower, and as the city expands its boundaries with developments, there are notable price surges as seen in pricing spikes since 2010.
Micro Markets like Sarjapur, Varthur and beyond are poised for state of art real estate development and occupation, the price being marked to market along the outward radial distance from the city center. Due to the surge in home buying interest and greater ownership rates caused by the pandemic, home prices in these peripheral areas are expected to increase in future years.