December 10, 2016 - Lodha Palava
Ready to move home scores higher than an under-construction
Those who are seriously considering investing in a new home need to take a few points into consideration before making a decision. Builders offer ready-to-occupy homes as well as under-construction projects for sale.
Usually, you’ll find that the under construction homes are offered at a lucrative price and it is only natural that you might consider it a better choice. Wait! There’s more than what meets the eye.
The most obvious advantage of a house that is already ready is that you can shift there as soon as you want. This makes a lot of sense if you’re staying in a rented accommodation. You’ll be saving the rent you’d otherwise pay until the house under construction is ready to move into.
Also, keep in mind that delays beyond what has been quoted for completion is the norm rather than the exception. You incur a higher risk if the builder isn’t reputed or if there is a compromise in all the features the house is supposed to have.
Let’s look at the finance part. Normally, when you take a home loan for a house that is under construction, the EMI payments start only after completion. However, if there are unexpected delays but your entire home loan has been disbursed to you, you will have to start paying the EMI right away. Imagine the strain if you have to pay the rent and the EMI while waiting to move in!
Then there is the tax aspect to be taken into account. With a ready-to-move property, you are immediately eligible for tax benefits. You get a deduction in the interest paid on the money for construction or purchase. You risk losing this benefit if the house under construction is delayed many years beyond the estimate.
Last, but definitely not the least, don’t forget that an incomplete house doesn’t have the same liquidity as its counterpart. You can’t sell an under-construction project whenever you want or at the price you expect! You need the builder’s permission and expect a deduction in his commission in the deal.
All in all, despite the seemingly higher cost, a ready to move home is a safer bet and will offer you more benefits. Choose wisely!