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Why do we buy under const flats?

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Why do we buy under const flats?

Last updated: November 10 2009
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  • Why do we buy under const flats?

    Can someone please make me understand this point. What could be the reasons for buying a under const flat?

    1.Lesser price: But then we have more risk. the project can get delayed, the project can get stopped, the builder can change specs, the builder can use lowest possible quality etc. etc. etc.

    Doing some financial calculations maybe if we do some interest calculations on either loan or our own money we might come to see that the equation might not be very different id buying under const or finally after const. Depending on the psf price the difference could be approx 10$-20% (Theoretically seems fine but will have to check this with real numbers)

    2.Availability: This could be a problem. But I believe there would be resale flats available as investors are always there in RE properties.

    While, if we buy ready possession flats we can see the building and flats for ourselves before we buy. we dont have to deal with Builder Tantrums and manupulations. we know from existing tentants the problems. since we have delayed our buy we know of our financial health even better.

    Please help me here. What are the other things that play a role in why people buy under const flats? I am trying to seriously analyze if it at all makes sense to go for a under const during any circumstance.

    VK
  • #2

    #2

    Re : Why do we buy under const flats?

    I think under construction flats make sense only in investment standpoint...genuine buyer who is looking forward to buy first home should consider buying ready possessions. Buying under construction flat can be considered if all of the below conditions are met -
    1) Builder is reliable
    2) Location is strategic (connectivity, accessbility etc.)
    3) you have cash sitting in your banks which you want to invest to multiply
    4) This is not your first home and you are not looking forward to move in immediately. You dont have any emotional attachment to a property that you want to purchase. OR this is your first home but you are not planning to move in for next 2 years and want to purchase property to protect against the rising prices.

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    • #3

      #3

      Re : Why do we buy under const flats?

      Under construction flat

      Advantages -

      1. Floor selection and variety of flats available to choose as per the floor plan in your mind.

      2. Any changes in under const. flat are easily possible.

      3. If you don't have enough cash in hand then you get good amount of time to collect the cash if you are planning to reduce the amount of loan taken.

      If you choose a good project and good builder then i don't think there is any risk inolved ..

      Disadvantage

      1. Risk if the builder is new...

      2. Add the cost of EMI u will pay till you get your possession.

      3. Possesions are always delayed by minimum 3 mths by any reputed builders.

      These very simple thoughts came to my mind .. I know ppl can write a book on this subject but finally its call you need to take based on the budget, need/time and location where you are looking for the flat.

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      • #4

        #4

        Re : Why do we buy under const flats?

        Originally posted by w_sanjay View Post
        Advantages -
        1. Floor selection and variety of flats available to choose as per the floor plan in your mind.
        Agreed. But how many of us have had experiences when we go to an under const building and the sales guy says only 4 flats left. 2 on top floor one on 1st and some other one. where is the choice.

        Originally posted by w_sanjay View Post
        Advantages -
        2. Any changes in under const. flat are easily possible.
        Yes. True again, If the builder is cooperative.

        Originally posted by w_sanjay View Post
        Advantages -
        3. If you don't have enough cash in hand then you get good amount of time to collect the cash if you are planning to reduce the amount of loan taken.
        If one buys later then one has time in hand to collect cash as well. the difference is in one case you are forced to produce cash in the other you plan nicely to have more cash in hand.

        VK

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        • #5

          #5

          Re : Why do we buy under const flats?

          Never buy in under-construction project, let builders invest from their pockets (black earned Or by debt) and realize how difficult to earn white money and risk involved.

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          • #6

            #6

            Re : Why do we buy under const flats?

            Ready poss is always safe bet.
            1. There have been instances in other cities where close to ready poss flats were sold at cheaper rates than under cons ones, especially for those projects which started in boom time & are yet to be completed. So, buying early doesn't guarantee you that you bought flat cheap.
            2. Cities like Pune have large scale investors flat also which will come ready poss at cheaper prices. Of course they are incidences where the builder reduces prices so much that the investors need to sell by making considerable loss.
            3. In addition to customisation etc. as said by sanjay above, other aspect is Vastu (those who believe in it) as it gives you more options as well as some internal mods like change in internal doors, location of sink, kitchen platform etc.
            4. Parking slot of your choice.
            Other factors to be considered should be:-
            • Completion,
            • Financial muscle of the builder,
            • Record of his previous projects,
            • Total bookings in that project,
            • Track record in terms of giving what is committed,
            • Approval by banks & which banks.
            However, I have also seen that some people get to buy last, yet get the best flat. This is sheer luck, I must say.



            Buying under-cons can be risky as discussed several times but if you know the builder well (which may not be the case for many) & have seen his record & know the no. of bookings in the project as well as the finance situation, you can well go for the project though not in bookings stage but when the RCC is complete as well as the plastering etc. i.e. just few months from completion. But, I reiterate that it is always better to go for ready poss if one doesn't have insider info of the project/builder.

            More than price, floor etc. it is the ability to deliver in stipulated time which matters more. No point in saving 4-5L & getting 50-55L stuck!!
            If you are happy, you are successful.

            Comment

            • #7

              #7

              Re : Why do we buy under const flats?

              Just to mention, there are some builders which quote penalty percentage in the agreement incase of delays or cancellations. Make sure to cross check it if going in for under cons flats.
              Live in your house and let others live in their houses!

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