Investing in under-construction property may prove to be a great financial decision for you. The prices may be lower, and you may also have a chance to earn better returns on your investment in the long term.
However, investing in under-construction property also involves some amount of risk. Real estate expert Deepinjit Singh, Director, Aventus Buildtech shares things to keep in mind before investing in under-construction property, you should check the following things:1. Builder’s reputation and track recordThe reputation of the builder is one of the most crucial things that you should check before investing in under-construction property.
If the builder has a good reputation in the market for delivering quality homes on time, then you should definitely invest in their under-construction property. You should check the reputation of the builder by going through their past track record. If you find that the builder has a poor reputation for delivering homes on time, then you should definitely avoid investing in their under-construction property.2. RERA registrationThe registration of property under RERA is non-negotiable for under-construction properties.
This ensures that the builder is following all rules and regulations. It is also important for you to ensure that the property is genuine or not through the RERA website of the state. It is not advisable for you to invest in a property that is not registered under RERA. This would put you in a precarious position, and you would have no way out of it.3. Land title and legal clearancesIt is imperative to ensure that the land is free from title disputes.
This would avoid legal hassles for you in the long run. It is also important to ensure that all legal clearances have been obtained for the project. Ignoring this would mean that your money would be locked away for years due to disputes.4. Approved Building PlanIt is imperative for you to ensure that the approved building plan is sanctioned by local authorities. This would ensure that you are not dealing with a property that is not approved or is constructed without any kind of authority.
This would help you avoid any kind of legal troubles for yourself. It would also help you avoid any kind of unpleasant surprises.5. Construction ProgressWhile marketing brochures may convince you, nothing beats visiting the site to get a real sense of the construction progress. Seeing the site with activity, workforce, and development is a good sign. Conversely, if you notice that the construction is moving very slowly or almost nowhere, it may reflect negatively on the developer.6. Payment plan structureThe payment structure is also a very important factor that you should consider when buying a property. It is recommended that you opt for a construction-linked payment structure because it is the safest option for you. This is because you will end up paying for what you have seen being developed on site rather than paying huge sums of money before you have seen anything developed.
7. Possession timeline and delay clauseIn evaluating the timeline for the handover of the property, it is always advisable to take a pragmatic approach.
The builders might promise you a specific date for the handover of the property, but we all know that delays are inherent in the business of real estate. Therefore, it is always advisable to ensure that there is a penalty clause for delays so that you receive at least some compensation for the delay.8. Home loan approval from banksIn cases where reputed banks and financial institutions have approved the project, there is an added sense of credibility.
This is because banks do their own due diligence before giving out loans. This will reduce your risk factor to a great extent. Moreover, if the project is pre-approved, there will be an added advantage for you in terms of getting a loan done quickly. Lack of approvals from banks and financial institutions is a point of concern.9. Amenities vs. realityIt is possible that the developer of the particular project may promise many facilities for his/her project.
It is also possible that the facilities promised may not be provided in the project. It is extremely important to know the difference between the promised facilities and the facilities that are actually provided in the contract. It is extremely important to believe only the things that are included in the contract legally and nothing else.10. Agreement details (fine print)The sale agreement is the basis of your investment, and all of it is important.
It is also important to understand the difference between carpet area and super built-up area, as it may have an impact on the area you are paying for. It is also important to ensure that there are no hidden costs, like maintenance, parking, or membership fees for a club, etc. It is always better to let a lawyer go through the agreement for you so that you can understand all of it, including clauses that are not in your favour.It is important to note that buying an unfinished house entails as many risks as it does opportunities. The possibility of making profits from this venture might be very large, but not considering some factors can bring financial problems.Having a thorough analysis and proper verification of the various elements that concern the property would definitely make you feel relieved. It is not about how fast you make a decision when buying a property but about verifying every aspect of the house before purchasing it.
