Top Benefits of Buying Under-Construction Property

When compared to ready-to-move-in properties, purchasing an under-construction property can result in significant savings. Typically, the price per square foot for properties under construction is 3 to 5% lower. Builders often offer discounts during the construction phase to boost sales, and buyers can often negotiate additional price reductions. Locking at a lower price protects against future price increases. Furthermore, the reduced purchase price results in lower stamp duty and registration taxes.

Additionally, the Income Tax Act of 1961 allows for higher interest deductions of up to Rs 2 lakhs under Section 24B and tax deductions of up to Rs 1.5 lakhs on principal repayment under Section 80C. Despite the longer waiting period for possession, the long-term savings make under-construction properties an appealing choice.

Owners of under-construction properties have the opportunity to choose fittings, finishes, and floor plans. Buyers can select tiles, cabinets, and flooring and modify the floor plan. Builders are typically more accommodating to customization requests during the construction phase. Customization adds significant value by allowing you to create an ideal residence that suits your lifestyle. However, buyers should be reasonable with customization requests to avoid delays and increased costs. Ideally, all changes should be finalized during the initial stages of construction. Extensive modifications made after construction has begun can lead to project delays. In addition to obtaining written approval from the builder for customization requests, buyers should assess the impact on property possession timelines.

Typically, under-construction properties appreciate at a faster rate than completed properties. As construction progresses, the location’s infrastructure improves and becomes more developed. The lower pre-launch prices result in a higher appreciation rate once the project is completed. The prospective market value of the property increases as the building matures. However, appreciation is contingent on factors such as location, builder reputation, and demand-supply dynamics. Investing in under-construction properties, whether for end-use or investment, can yield substantial returns over time. After a few years, when the property becomes available for occupancy, owners can anticipate substantial gains when selling the property. It’s a prudent choice for those with a long-term investment horizon. Moreover, NRIs can buy property in India by investing in under-construction projects for better returns. However, there are risks associated with project delays that could impact returns. It’s wise to conduct thorough research before making a purchase.

New, residential under-construction buildings and commercial under-construction buildings often feature amenities not found in older complexes. The construction industry incorporates cutting-edge technologies and eco-friendly features. Homes may include intelligent home automation, electric vehicle charging stations, solar panels, and more. In commercial spaces, eco-friendly building materials, energy-efficient HVAC systems, and intelligent lighting controls are used. These new features enhance the desirability of the property among owners and tenants.

Nonetheless, it’s crucial for buyers to confirm promised amenities through RERA registration and regular site visits during construction. Occasionally, architects may omit certain amenities or specifications during construction, so examining the amenities and visiting the location is vital.

Compared to completed homes, builders offer more flexible payment options for under-construction properties. Payments are structured as milestone-based instalments. Buyers only pay a nominal fee upon booking and have the flexibility to plan their finances more effectively since they aren’t required to pay the full purchase price upfront. However, it’s essential to carefully assess payment plans to ensure they comply with RERA regulations.

Timely instalment payments also help maintain a positive relationship with the builder. It’s crucial for buyers to thoroughly understand the payment schedule and be aware of any applicable penalties for missed payments. Seeking professional advice to evaluate the payment plan before reserving a property is strongly advised.

While there are numerous advantages to buying under-construction properties, it’s imperative that buyers monitor the progress of the project consistently. Construction delays are common in the industry, so visiting the site for regular reviews is essential. During these visits, you can assess the quality standards, labour availability, material supply, and equipment. Additionally, confirm compliance with approvals and legal requirements. Being proactive ensures that the property will be completed on time and to the desired quality standards. If you observe deviations from the project blueprint, it’s crucial to alert the builder immediately. In some cases, buyers may hire third-party quality inspectors to monitor construction progress regularly, minimizing risks and preventing significant obstacles in project completion.

The ideal time to purchase an under-construction property is typically immediately following excavation and foundation work. Costs are at their lowest during this phase. Buyers can secure a property at the current price by making an early reservation with the builder.

Those who purchase before the official launch and marketing of a residential or commercial under-construction project can secure introductory prices. Prices incrementally rise with each construction milestone, ensuring a larger share of capital appreciation.

Once the superstructure and floors are built, it becomes clearer whether the project will meet its completion schedule. Prices are higher than those of move-in ready units but remain lower than the final rates. Additionally, the execution risk of the project is relatively reduced at this stage.

Buying an under-construction property 6-12 months before the promised possession date is also an ideal time. At this point, construction is in the final stages, with only minor tasks remaining. Buyers can secure reservations for future occupancy at the current construction rate.

Yes, purchasing an under-construction property allows the owner to make customization requests regarding the floor plan, fixtures, and amenities within certain restrictions. This flexibility is typically not available for move-in-ready residences.

Buyers should schedule regular site visits during construction to inspect progress and quality standards. It’s also advisable to verify compliance with approvals, materials used, and construction milestones.

Common risks include construction work delays, quality issues, and legal complications. Conducting thorough due diligence on the builder and the project before purchasing can help mitigate some risks.

Buyers should visit the under-construction site and inquire with the builder’s sales team regarding the project’s current status, approvals received, timelines for completing key activities, and more. This helps assess the project’s execution progress and the risk of delays in the property’s timely delivery.

Before reserving an under-construction property, it’s advisable to obtain and thoroughly review the builder’s sanction plans, payment schedules, site maps, layout plans, specifications, and completion certificate to prevent future disputes.