Buying a ready-to-move-in or an under-construction property depends on the buyers preferences and priorities. A buyer must consider the pros and cons of buying either of these while deciding what is best for them in their specific circumstances. This is an important topic that is discussed in a home-buying guide.
We can look at the advantages and disadvantages of each of the options to make the decision process simple.
Ready-to-move-in
A ready-to-move-in property is one which is ready and available to occupy immediately after making the payment and completing the legal procedures.
Advantages
1. In ready-to-move-in property you will get what you see. There will be no surprises in the future. You can also evaluate the construction quality, surroundings, neighborhood, and amenities before buying the property.
2. There is no waiting period or delays in possession of the property. There can be no price escalations or hidden costs which are revealed at a later stage.
3. The GST of 5% which is levied on under-construction projects is saved in case of ready-to-move-in properties on all the
flats in Kandivali East.
Disadvantages
1. A ready-to-move-in property usually comes at a premium price compared to an under-construction one. Since the property is available immediately the builder charges the current market price.
2. A ready-to-move-in property like some 2 BHK flats in Parel, may not be brand new. It could be in the market for some months or a few years. The property may need minor repairs and some touch-ups to make it look good and liveable.
3. Units that are ready with an Occupation Certificate as on 1 May 2016 are not mandated to be under the purview of RERA. This is a concern as the developer is not responsible for grievance redressal and accountability.
Under Construction
Properties in the various stages of construction that have a time period between booking and possession are known as under-construction properties.
Advantages
1. An under-construction property will cost lesser than a ready-to-move-in one. The difference is anywhere between 10% to 30% which can be significant savings.
2. The value of under-construction properties can appreciate by the time it is ready to be occupied. The difference of a few years can gain significant gains on the property value.
3. All real estate builders in Mumbai must register their under-construction properties under the RERA. This gives the buyer confidence about the property legitimacy and compliance.
Disadvantages
1. Buying an under-construction property is always associated with risk. There can be factors that may delay or cause major hindrances in the completion of the project. This can be stressful as the transactions are of high value.
2. There can be differences between what was promised and what is delivered. Changes in floor plans, fixtures, furnishings, and other minor aspects are common.
3. Under-construction property attracts a GST tax incidence of 1 to 5 percent depending on the total cost of the property.
Keeping these important pointers in mind, home buyers and investors can choose either a ready-to-move-in or under-construction property after doing an evaluation of their financial situation and life circumstances.