A pre-owned flat or one that’s under construction: Which one’s the safer bet?
Looking to buy a flat and not sure if a resale or under construction flat is better? Well, this is a common dilemma faced by most prospective house buyers these days as construction companies offer a lot of lucrative deals for both these property types. To clearly point out which one of these is better can be a little difficult, as both resale and under-construction flats come with their own set of merits and demerits.
The choice ultimately depends completely on a lot of additional factors like if you are availing a Home Loan to buy the house, the down payment you have in hand, and if you can wait till the under-construction flat is completed.
So, here’s a simple guide for you to understand which of the property types is best suited to your needs and requirements.
Under-construction Property: The Benefits
When you probably opt to buy an under-construction flat, the most lucrative part is the fact that the payment can be done in easy instalments. On the contrary, if you opt for a resale property purchase, you may have to pay the entire amount upfront unless the owner decides to give you some time.
However, the tables can turn if you opt for a Home Loan – the overall costs may go higher in case you decide to buy an under-construction property. But still, you would get the property at a much lower price than buying the house after it is completely built as builders may add some extra hidden costs at the last moment. Also, investing in an under-construction property is a boon for those who are particular about any specific floor type, room designing, interior work or the direction of the house.
Under-construction Property: The Drawbacks
Just like the two sides of a coin, an under-construction property has its own share of drawbacks about which you should be well aware of before you think of investing.
- In case you have opted for a Home Loan, you should always be ready to bear the brunt of a delay in the construction owing to pending permissions from some authorities or any other emergencies that may come up.
- Remember that you do not get any additional tax deductions on your loan amount until you take possession of the property. Any delay in construction would mean you will be paying EMIs on your Home Loan without availing any tax deduction. Additionally, you would still have to pay the rent for the property where you currently reside.
- The clarity about maintenance charges in an under-construction property is also highly unlikely as there would be no committee or society association which shall determine the charges. This maintenance charge is an additional burden on your pocket as it’s neither included in the Home Loan amount nor can you get any kind of tax deduction on this.
- The construction plan may undergo a change during the building phase which may not only delay the final completion of the house but also add some extra charges to the overall cost of the house.
Resale property: Enjoy the Benefits
Buying a resale property maybe indeed a good idea as it comes with a lot of benefits that include:
- You can verify all legal documents of the property beforehand to eradicate any chances of fraud dealings or unauthorised possession issues. If certain certificates are pending, then the application status can be checked, which is a little difficult to check in case of under construction property.
- There is no anticipation or added tension which comes along with a property under construction as it may get delayed at times due to varied reasons. Your property is also safe from any fluctuation in the real-estate market.
- As you get immediate possession of a resale property, you can start availing tax deductions on your Home Loan. This means a resale property may be more pocket-friendly than an under-construction house even though the former comes at a slightly higher price.
- Another additional benefit of buying a resale property is that you can avoid the VAT, service tax and other additional taxes applied on new properties. These costs are non-existent when you move into an existing property.
- The details about maintenance charges are quite clear as there’s an existing society/committee which determines the charges and the builder cannot intervene or charge exorbitant maintenance fees.
Resale property: Things you should know!
- In case you buy a resale property, you do not have the option to make any modifications or changes as the house has already been built. Also, the society might restrict any structural or additional changes to the pre-constructed house.
- The resale house might have been damaged due to years of use and also it might be difficult to renovate the property.
- It’s not always possible to get the flat on the floor you want, interior work, decor and other additional amenities in a resale property as the house would have been constructed as per the needs and requirements of the original owner.
- Premium apartments that come for resale are available at slightly exorbitant prices which may be a little taxing on your pockets.
After having learnt about the merits and demerits of an under-construction and resale property, it should be easier for you to now make the correct choice depending on your budget and requirements.