Ready-to-move-in vs Under-construction Flats: Which is Better?

Choosing between ready-to-move-in and under-construction flats depends on your immediate need for a home v/s willingness to wait for potentially greater benefits. Ready-to-move-in flats are better in terms of the convenience of immediate possession with no risks related to construction delays, while under-construction flats are better when it comes to financial flexibility and asset appreciation.

Ready-to-move-in flats are completely built and available for immediate occupancy, allowing homebuyers to bypass the waiting and uncertainties that depend on the construction status. Under-construction flats are in the process of being built and offer potential cost savings, modern designs, and price appreciation; but require homebuyers to wait till the project is completed, which can sometimes involve delays.

Choosing the right type of flat is paramount, as it affects your financial planning and lifestyle needs. Key factors in this decision are the budget, your timeline for moving in, and level of customisation required. Each of these elements plays a significant role in determining whether a ready-to-move-in or an under-construction flat is the better option for you.

Ready-to-Move-in Flats

Available for immediate occupancy, these residential units have completed all construction phases, including finishing touches like plumbing, electrical fittings, and more. As the name suggests, these flats are ready for buyers to move in, as soon as the purchase process is completed, eliminating any waiting period typically associated with construction or development. This option is ideal for homebuyers who need a quick relocation and prefer to experience firsthand the abode they will be living in, before finalising the purchase.

Advantages of Ready-to-move-in Flats

Opting for a ready-to-move-in flat comes with a host of advantages that eases the homebuying process and provides peace of mind. These benefits cater especially to those who require immediate housing or wish to avoid the uncertainties associated with under-construction projects.

1. Immediate Possession and Move-in

   One of the most significant advantages of these homes is the ability to take possession and move in immediately after the purchase. This is particularly beneficial for those who are in urgent need of accommodation, or do not wish to deal with the interim period of renting another place while waiting for their new home to be ready.

2. No Waiting Period or Construction Delays

   With ready-to-move-in properties, homebuyers bypass the unpredictable waiting periods associated with under-construction flats. There are no construction delays to worry about, as the building is already completed and Occupancy Certificate received. This certainty can be a huge relief, especially for homebuyers who have rigid timelines for relocation.

3. Assess Quality and Amenities Before Buying

   Ready-to-move-in flats allow buyers to inspect the actual property, not just a show model. This means you can thoroughly assess the quality of construction, the finishes, and the amenities provided. You can check everything from the functionality of fixtures to the outside view, ensuring that everything meets your expectations before making a commitment.

4. Lower Risk of Project Abandonment

   Purchasing a ready-to-move-in flat reduces the risk associated with under-construction projects, such as the developer facing financial difficulties or any other issues that could lead to project abandonment.

Disadvantages of Ready-to-move-in Flats

While ready-to-move-in flats offer several advantages, they also come with certain drawbacks that homebuyers should consider:

1. Higher Price Compared to Under-Construction Flats

   Ready-to-move-in flats are more expensive than their under-construction counterparts. This price difference is due to the immediate availability and the elimination of risks associated with the construction phase. Buyers pay a premium for the convenience and security of acquiring a property that is complete and ready for immediate use.

2. Limited Options for Customisation

   Since the construction is already completed, making significant changes to the layout, materials, or finishes can be challenging and potentially costly.

3. May Not Benefit from Potential Property Value Appreciation During Construction

   Buying an under-construction property can sometimes offer financial benefits in terms of appreciation of property value by the time the construction is completed.

   Being already completed, ready-to-move-in flats miss this phase of potential value increase, which can occur due to developments in the surrounding area or improvements in market conditions during the construction period.

4. Tax Implications – GST on Ready to Move Flats

   Ready-to-move-in flats that have received their completion certificate do not attract Goods and Services Tax (GST) in India. This can be seen as a financial benefit.

   However, this also means that any potential tax benefits that could be leveraged during the construction phase, such as input tax credits for developers which could be indirectly passed on to buyers, would not be available.

Must Visit: Ready-to-Move-in Flats for Sale in Bangalore

Under-Construction Flats

These are residential properties that are in the process of being built, and are typically available for purchase from a developer or builder before the project is finished. Homebuyers commit to these properties based on architectural plans, models, or show flats, and they often make phased payments according to construction milestones.

Advantages of Buying Under-Construction Flats

Purchasing under-construction flats can offer several financial and practical benefits that are particularly attractive to many homebuyers:

1. Lower Upfront Cost Compared to Ready-to-Move-In Flats

   These properties are often priced lower than comparable ready-to-move-in flats, as they come with the risk of construction delays and the inconvenience of waiting for project completion. This price difference can make them more accessible, especially for first-time buyers or those with budget constraints.

2. Potential for Higher Returns on Investment

   Investing in under-construction properties can potentially yield higher returns. As the construction progresses and the area develops, the value of the property may appreciate. By the time the construction is completed, the flat might be worth significantly more than its initial purchase price, especially in rapidly developing regions.

3. More Options for Customisation

   Buying a flat during its construction phase may offer opportunities for customisation, if the developer allows it. Depending on the construction status, homebuyers can choose finishes, fixtures, and perhaps even modify the layout to suit their preferences.

4. Possible Tax Benefits on Under-Construction Home Loan

   There are specific tax benefits associated with home loans for under-construction properties in India. Buyers can claim tax deductions on the interest paid during the construction period, under Section 24(b) of the Income Tax Act.

   The total interest paid while the property is being built is deductible in five equal instalments starting from the year the construction is completed, subject to certain conditions and limits.

Read More: Advantages of Buying An Under-Construction Flat in Bangalore

Disadvantages of Buying Under-construction Flats

While under-construction flats offer various advantages, they also come with certain risks and disadvantages that prospective buyers should consider:

1. Risk of Delays in Possession

   Due to unforeseen circumstances such as funding issues, regulatory approvals, or construction challenges, the completion of the project could get delayed.

2. Project Completion Uncertainty and Potential for Abandonment

   Factors such as the developer’s financial stability, changes in the real estate market, or legal issues can lead to delays or even abandonment of the project.

3. Difficulty in Assessing Final Quality Before Completion

   When purchasing an under-construction flat, buyers typically rely on architectural drawings, sample flats, or digital renderings to make their decision. It can be challenging to assess the quality of the final product, including the materials used and the standards of construction, until the project is completed.

4. GST Implications May Differ

   Under-construction properties in India are subject to Goods and Services Tax (GST), which is not applicable to ready-to-move-in flats that have received a completion certificate. The GST rate for under-construction properties can significantly affect the overall cost of the flat, although buyers may benefit from input tax credits available to developers.

Comparison Between Ready-to-move-in and Under-Construction Flats

When choosing between these flats, homebuyers must weigh a variety of factors to determine which option best suits their needs, financial situation, and timeline. Each type of property offers its own set of advantages and challenges.

Understanding these can significantly influence your satisfaction and financial outcomes as a buyer. Here is a detailed comparison to help you understand the differences between these two types of properties:

Aspect	Ready-to-Move-In Flats	Under-Construction Flats
Price	Higher, due to immediate availability and absence of construction risks	Usually lower, as buyers take on the risks of ongoing construction
Possession Time	Immediate, allowing for quick relocation without any waiting period	Can vary; subject to construction progress and potential delays
Tax Benefits	No GST applicable if the flat has received completion certificate	Buyers can claim tax deductions on interest paid during the construction phase
GST	Not applicable on completed properties that have a completion certificate	Applicable, usually at a rate decided by the government, affecting the total cost
Customisation	Limited, as the flat is already constructed. Major changes can be difficult and costly.	More flexibility in choosing finishes and modifying layouts, depending on the construction stage & builder’s willingness.
Risk of Delays	No risk of construction-related delays	High risk of delays due to unforeseen factors in the construction process
Project Completion	No risk of project abandonment; the property is already ready	Potential risk of project stalling or abandonment, if the developer faces issues
Quality Assessment	Direct inspection of the actual flat is possible, ensuring transparency in quality	Based on plans and show models, final quality might differ from expectations

Factors to Consider When Choosing between Ready to Move in or Under-Construction Flats

When deciding between purchasing a ready-to-move-in flat or an under-construction property, several key factors must be carefully evaluated to align with your personal circumstances, financial goals, and lifestyle needs. Here is an exploration of these critical considerations:

1. Budget and Affordability

   Your budget plays a crucial role in determining which type of flat is more suitable. Ready-to-move-in flats demand a higher initial investment due to their immediate availability and the absence of construction risks.

   In contrast, under-construction flats might be more budget-friendly and could offer payment plans that spread out the financial burden over the construction period, making them more accessible to homebuyers with tighter budgets.

2. Urgency to Move In

   If you need to relocate immediately or within a short time, ready-to-move-in flats are the ideal choice as they allow for instant possession. This eliminates any waiting period and the hassle of finding temporary accommodation. On the other hand, if you have the flexibility of time and can afford to wait, opting for an under-construction flat might be more advantageous.

3. Preference for Customisation

   For buyers who value personalisation and wish to tailor their living spaces to their tastes, under-construction flats offer more opportunities for customisation. From selecting floor plans to choosing finishes, these properties can often be modified during the construction process. Conversely, ready-to-move-in flats offer limited customisation options, as major changes can be cumbersome and expensive.

4. Investment Goals

   If you are looking for immediate occupancy without the concern of value appreciation, a ready-to-move-in flat would be suitable. However, if you are aiming for potentially higher returns on investment through property value appreciation during the construction phase, an under-construction flat could serve better.

5. Risk Tolerance

   Finally, assess your tolerance for risk, especially concerning delays or uncertainties in project completion. Under-construction flats carry inherent risks – such as delays, project abandonment, or deviations from promised specifications – which can impact your financial and living situation. If you prefer a safer, more predictable path to homeownership, a ready-to-move-in flat might be the way to go.

Must Visit: Under-Construction Apartment Projects in Bangalore

Conclusion

Both ready-to-move-in and under-construction flats offer distinct advantages and certain drawbacks, that cater to different buyer profiles. Ready-to-move-in flats provide the convenience of immediate possession and eliminate risks related to construction delays or quality uncertainties, albeit at a higher cost and with limited options for customisation.

On the other hand, under-construction flats typically offer lower initial prices, opportunities for customisation, and potential for property value appreciation; but carry risks of delays and uncertainties in project completion.

The choice between these two types of properties should be guided by your individual needs, priorities, and circumstances. Consider factors such as your budget, urgency to move, desire for customisation, investment goals, and risk tolerance. Each buyer’s situation is unique, and what suits one might not suit another.

FAQs

1. What does ‘ready-to-move-in’ mean?

A ready-to-move-in flat means a property that is fully constructed and ready for immediate occupancy. You can move in as soon as the financing and paperwork is complete.

2. What does ‘under construction’ mean?

An under construction flat means a property that is still being built. The possession date will depend on the progress of the construction.

3. Is there a GST difference between ready-to-move-in and under-construction flats?

Yes, there is a GST difference between ready-to-move-in and under-construction flats. For ready-to-move flats, you will typically not pay GST if occupancy certificate is received. For under-construction flats, GST is levied and the amount depends on multiple parameters.

4. Can I customise a ready-to-move-in flat?

You can customise a ready-to-move-in flat, but this would be limited to minor modifications. Most developers would not allow structural changes in buildings that are already constructed, as it may affect the stability and strength of the homes.

5. What are the tax benefits of an under-construction home loan?

The tax benefits of an under-construction home loan include deduction of interest paid during the construction period from your taxable income. This can provide some financial relief while you wait for possession.

6. What if the possession of my under-construction flat gets delayed?

If the possession of your under-construction flat gets delayed, the developer is liable to pay a certain amount as per the provisions of the Real Estate Regulation and Development Act (RERA) Act. However, it is important to carefully review the builder's track record and the project agreement before investing.

7. Which option is better for investment - ready-to-move-in or under-construction?

Generally, under-construction flats are better for investment, compared to ready-to-move-in flats – as property value appreciation can happen during the duration of construction. However, this comes with the risk of delays and project completion uncertainty. Ready-to-move-in flats offer a more stable investment with immediate rental income potential, but the appreciation might be lower. The best option depends on your goals and risk tolerance.