Home seekers like to select a property that is not very far from grocery stores or markets, hospitals, schools, railway stations and bus stops. Property buyers check many more things as buying a home is one of the biggest decisions they make in their lifetime.
While they pay a lot of attention to the locality of the property and amenities provided by the builder, it is very common among buyers to ignore some important aspects of property deals.
While buying a home, you have two options. You may either buy a finished property where you can move in the same day you buy it; or opt for a property under-construction which is expected to be fit for dwelling within a few months or maybe over a couple of years at max.
There is a difference between a ready-to-move in property and the one that is still under-construction. The former exposes you to lower risk while the latter carries higher risk. Let’s first understand what can possibly go wrong with an unfinished property.
The developer may miss timelines for a number of reasons such as land disputes, lack of funds, lack of regulatory clearances, labour problems and lack of demand among others. Therefore a property that looks relatively cheap when under-construction may become a costly affair for you if the developer fails to hand it over to you as scheduled.
To avoid being trapped in an undesirable situation, you must take care while you make a decision to buy an unfinished property.
Things to remember...
PersonalFN is of the view that while buying an under-construction property is alright, complete research must be undertaken due to the risks involved. Irrespective whether you are buying a property for dwelling or investment, keep the above mentioned points in mind to protect your hard earned money from getting locked in a wrong deal. Real estate as an asset class is relatively illiquid.
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
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