Many people, when they decide to buy a property, face the well-documented conundrum. They find it hard to decide whether it is better option to invest their hard-earned money in an Off-Plan Vs On-Plan Property?
It’s obvious that when it comes to buying property, there is no ‘one size fits all’ solution. Whether you want a ready unit or an off-plan property, it entirely depends on your needs, budget and accessibility to finance. If you’re looking for a place to live, a ready property would be a more suitable option to invest for you. Because you can move in as soon as possible. Contrarily, if you’re looking for a property to rent out or sell, an off-plan property would be better as the amount required can be significantly less than an equivalent completed property.
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To answer this question, let’s compare the two assets by analyzing the pros and cons of buying off-plan versus on-plan and what buyers need to look out for.
First you need to decide whether you are buying the property as an end-user or as an investor.
When it comes to ready properties, they provide you twin benefits. On one hand, they will allow the users to move in and use the property instantly. On the other hand, the investors will see an immediate return right after their investment through high rental yields. For instance, if you are planning to buy 2BHK flats for sale in South Mumbai or anywhere in India, then apart from earning higher yields, you will get only what you see. As it is tangible, you can inspect each and everything thoroughly such as facilities or amenities. However, the disadvantage is that the pricing for a ready-made property is often higher.
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Contrarily, while there is no denying the fact that off-plan is often more affordable, you will have to wait for the completion of the project. Moreover, if you are looking for capital inflows, then the off-plan property is the best option to invest. You need to do research, check the developer’s record and facilities available in the area now and then, nevertheless.
Some analysts say that off-plan is a risky asset. That is why you get a price discount. Moreover, there is a chance that your property may not be built, or maybe built late or may not meet your expectations when the construction is completed. You are, therefore, at the mercy of the developer, contractors and a whole array of other potential factors when investing in a project that is yet to start or finish construction.
So, be aware of all these risks. All the well-reputed developers will offer you less of a discount on market price. That is to say, you pay more for less risk. On the other hand, buying a built property may have risks associated with them. However, the unit is there for you to touch and see.
Everything depends upon your budget in one way or the other. Your budget will determine why to invest, where to invest and what you get in the end. Investing in off-plan property is a means to add more bang for your buck. Many developers offer more and more appealing payment plans for off-plan properties to increase investment. They may also ask little or no down payment and affordable monthly installments to help you buy your property easily.
Therefore, this benefit allows many would-be investors to purchase something that they perhaps may not be able to do on the ready-made market. Because in on-plan properties they have to pay full funds instantly. This is the main advantage of purchasing off-plan. They can spread out payments over a longer period as well as achieve a better price than if they are planning to purchase a similar completed property.
There are many people who don’t want to wait for months or years to get their dream home. Many buyers want to move in straight away or receive an immediate return by renting the unit out. So, for them, the on-plan is suitable.
The price of the off-plan is king. As this is a risky investment, you need to play the gamble in order to get the benefit. You should also expect a discount due to the opportunity cost of your funds. The developer pays you by offering you a much better price for off-plan. This would be much higher than you can get in the market for built. However, if they are not offering discounts, then don’t buy off-plan.
Unit Of Your Choice
One of the greatest benefits of off-plan sales is that you can choose your unit from a wide range. You can select the type, view and floor. Moreover, you can also customize them according to your needs. However, the downside is that as you can’t see the finished article, so what you get might look very different from what you thought.
With built property you may not be able to get the exact unit you want, but you can inspect everything. Whether you are buying flats in South Mumbai or luxury homes in any other place, you will be aware of the general quality of what you are buying.
All in all, it all depends on a number of crucial factors, as well as your overall objectives. You need to determine whether you want to benefit from the property now, which comes at a price. Or whether you wish to benefit from lower purchase prices and flexibility in terms of payments. Both bring forth opportunities and misfortunes alike. The choice is yours.