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The dilemma of buying a home: Under Construction versus Ready to Move-in.

The recent pandemic has made most homebuyers realise the real estate investment as an asset class in comparison to the unpredictable stock market. To cut the commute to the minimum, most home buyers are looking around for 3 BHK, 4 BHK & 5 BHK flats in south Mumbai.

The decision to buy an Under Construction property, that is nearing possession, in comparison to Ready to Move-in lies in the choice made by the buyer based on their investment strategy.

Here are some factors that will help determine your decision:

Points to consider for an Under Construction Property nearing Possession

While considering an Under-Construction property in a city like Mumbai, the appreciation of the property and the development around the property, within the given period, determines if it is a good investment.

Real estate has seen significant development in the heart of the city. There is a surge in the demand for 3 BHK, 4 BHK & 5 BHK flats in south Mumbai due to the various commute options like the Coastal Road, Sewri – Worli elevated corridor and the upcoming metro. Homes close to these developments like the 3 BHK, 4 BHK & 5 BHK flats at Vraj Tiara become a valuable real estate asset as well as in improving one’s lifestyle.

Easier on the Pocket
The buyer has more time in hand to spread the payment, registration charges, stamp duty, etc.

Level of Risk
There is relatively lesser documentation because there are no previous owners.

Less Legal Documentations
Relatively lesser documentation because there are no previous owners in comparison to the ready to move-in with legal work needed on the transfer title.

Higher Returns
Buying an under-construction property yields a higher return on investment due to the extended window period between the buying stage and delivery timeline. If you sell the property closer to possession, you stand a good chance of earning a healthy appreciation on your capital investment.

Points to consider for a Ready to Move-in
The ready to move-in luxury 5 BHK flats in Mumbai seem tempting for most home buyers. But some factors that need to be considered are given below.

High Cost
One of the difficult decisions of buying a ready-to-move unit is the higher cost as compared to an under-construction property. The approximate cost difference could be anywhere between 20-30 %.

Quality of Construction
In the case of an under-construction property, you have the option of evaluating the work progress and thus aware of the quality of construction in terms of the materials used, the strength of the foundations etc. However, in ready home, you cannot measure the quality of the work carried out.

Age of the Property
Unlike an under-construction property, buying a ready to move-in does not necessarily ensure a brand-new home. There may be chances of the property not being maintained or the property is up for sale for a long time.

Exclusion from RERA
When the apartments that are ready to move in are old buildings, the Occupancy Certificate as of 1 May 2016, are not mandated to be included under RERA.

As a result, its promoters are not liable to make its information available on a public platform.

Points to keep in mind, when investing in a ready-to-move-in or an under-construction house
• Ascertaining the total budget for purchasing the property to ensure your finances are in place.
• The property should have all the necessary documentation and approvals.
• All information about the seller associated with the project (such as banks, advisories etc.) should be obtained.
• Evaluate the surrounding developments before making the decision.
• The desired location should be selected, based on the buyer’s commute.

For most buyers, especially those looking for , the dilemma of buying a home depends completely on the liquidity of the buyer and the period of moving into a new home.

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