It’s every individual’s dream to own a space of their own, a dream house that they can never get enough of.
Subhash, a 32-year-old Civil Engineer, is living in a PG in Chennai, India. He managed to save enough money and decided to move to a better place where he could settle with his family permanently.
He faced a dilemma when choosing to stay in a ready-to-move (RTM) or an under-construction (UC) house.
Just like shopping, choosing a home is full of options which usually boils down to two broad choices- RTMs or UCs. Most of us are still bisected between the two options and don’t know how to choose.
We are here to help you out!
We have taken out the time to give you insights for deciding which one is better for you and how. Let’s discuss each of them in details with respect to ESPs and USPs.
What to Consider When Choosing A New Home?
- In big cities, you can choose an RTM property to avoid long waiting times and unnecessary cost overhauls from rented accommodation.
- Check the neighbors and the infrastructure before buying the property to have a complete sense of security.
- Double-check the construction quality, social & physical infrastructure, and durability before purchasing.
- Analyze the risks involved (if any) and the availability of loan facilities as RTM properties are a tad expensive.
- Make sure that the property doesn’t lie in the non-established part of the city where there isn’t enough potential for future prospects.
- For the sake of future development, buy a property when there is enough potential for price appreciation in the locality or region.
- Watch out for flexible payment plans, subvention schemes, and construction-linked plans for payment flexibility.
- Most importantly, make sure that the under-construction house complies with the Real Estate Regulation and Development (RERA) Act.
Both Ready-To-Move and Under-Construction
- The property should have all the necessary licenses and approvals from respective authorities.
- To get an idea about the feasibility and quality, make sure to get information on external third parties linked with the project.
- Choose a house and the desired locality based on your daily commute requirements.
- User-based reviews like testimonials or reviews can help you know better about the seller and the locality through social media or websites.
- Consider the total budget beforehand.
- Lastly, plan your finances well! You want to be a wizard at handling your money and pay timely installments on the loans (if taken).
What Are The Advantages?
No GST Implications
People shed tears of blood when the government levied Goods and Services Tax (GST) of 12% on the purchase of under construction property. Ready to move in the property was exempted from any sort of tax.
What You See Is What You Get
There is no room for discrepancies as you can inspect each unit before you move in, and there are fewer risks involved that make it easier for you to finalize your purchase. Amenities promised layout, and features are exactly the way you saw them before making the deal.
There is an absence of a waiting period as the construction is already completed and ready for you to move in. You can save money by paying for your EMIs instead of both rent and EMIs in case of under construction houses.
Minimal Risk Factor
There are almost no risks of delays or hassles, and the house is ready for accommodating. Banks are also willing to give loans with better offers as the risk involved is low.
At times, the seller may want to just clear the inventory, and that may land you up with a once in a lifetime deal like free additional parking.
Offers And Discounts
When buying an under-construction property, the seller gives amazing deals and offers to lure customers into investing. Expect deals like free parking spaces, memberships, gold coins, and foreign trips.
Forget about the harries and hassles of maintenance or repair as the construction is absolutely new. In fact, 70% of buyers prefer to buy absolutely new construction with new features.
Flexibility Of Payment
There is not a necessity to pay the entire amount in one installment. The booking amount can be around 10%-15% of the overall value.
Higher Appreciation Value
The value of the house or the land in the area may increase a sudden spike from its previous value. The appreciation of the value is greater and can reap better quantum profits from the point-of-view of investors.
Lower Overall Costs
Yes, waiting is slow, but with RERA in action, the builders are required to complete the building on time. There are subsidies and discounts given to the buyer that reduce the overall value of the house.
A Brief Overview Of Disadvantages
Exclusion from RERA
Ready-to-move properties before the first of May, 2016 are not mandatory to be included under RERA.
Age Of The Property
You may not always get a brand-new home but a repaired or an old one. If not maintained properly, you might regret the decision of buying it in the first place.
Quality Of Construction
You can’t evaluate the property during its construction phase, like in under-construction houses to ensure quality work being done.
Higher Costs Involved
A ready-to-move house will cost anywhere between 20-30% more than an under-construction house.
You can’t access the benefits of tax returns under section 24, 80C or 80EE of the Income Tax Act when applying for a loan to purchase a UC building.
Unlike in RTM properties, you have to shell out the 12% stamp duty and registration charges.
Expect to have the perils of not getting the final product that was promised to you initially.
Higher Risks Involved
Risks like funding crunch, increasing cost of materials, and lending rate increase may lead to the project being hindered.
Which One Do I Choose?
If you look at the advantages and disadvantages of each variant of houses that we have brought to you, you’d know that its indeed a tough choice.
The selection lies totally on your needs. If budget is your priority, choose an under-construction house or if time is the issue, move into an RTM.
If you are concerned about the quality, then there are sellers that give you the luxury of checking for quality of materials used in construction. Make sure you carry a Schmidt’s Hammer or at least an engineer with you who can assure you of the quality.
We know it in our bones that you, as the master of your life, will be able to master this choice as well!