Under construction properties are also favored by buyers with limited resources. To buy a ready to move in property a large amount is required. In a ready to move in property the payment options are also rigid. It has a higher EMI than an under construction property.
In an under construction property the buyer need only pay the booking amount. In an under construction property the EMIs are also lower than the ready to move in option. All these factors make an under construction property an excellent option for investments. But one must be cautious and wary of his investments. Under construction properties too come with their fair share of troubles.
It is paramount to go through the following procedures before considering investment in a property.
Do a thorough background check of the builder:
This should come as no mystery? You want a builder who has reputation of finishing his projects. Too many projects in our country have crossed the deadline and have gone well beyond it. These projects still linger and have blocked the buyer’s money. A little extra paid to an established builder with a clean reputation is not money wasted. Also make sure the builder has all the necessary permits in place. More than often these have halted construction. When studying them take your time or even take an expert opinion.
Keep track of the area around the project:
Investment in real estate is the same as any other market investments. They are subject to fluctuations; the cost of your investment will go up and down. The reasons range from market condition to buyer interests. Also keep in mind the area around your property that is under development. The area must develop commensurate with your property to maintain a positive trend. One example to quote would be of the real estate trend of Samshabad, Hyderabad.
The original plans for the area had a large Infosys campus and a chip factory. The area also had plans for engineering colleges, medical colleges and banks. None of these amenities realized due to the financial crisis of 2008. Result the property that was expected to meteorically rise, plummeted. Smart people cut losses and got rid of the properties weighing them down. Invest in your investments as much time as money you have invested in them. Keep track of the area under development and the market condition. Always be ready to take decisions after careful consideration and research.
Under construction properties on paper take two to three years to complete depending on builder to builder. But the returns on your investment can be seen on an annual basis. An excellent example of the same is Kamothe in Navi Mumbai. The real estate here clocked 23% rise on returns in just one year (2012 to 2013). A little caution and a little market research are warranted from the buyer in this segment of investments, but the returns are commensurate.