Off-the-plan property term refers to the property that is on papers and there is no physical existence yet. There has been lot of argument happening regarding one should buy off-the-plan property or the only established ones. Each kind has its own advantages and disadvantages. Considering the property market scenario in India most of the investors prefer buying constructed property over the one that is on the papers yet.
However, there are many benefits if you buy the property that is yet under construction or is about to get started. Let us check out the points that you should keep in mind before investing in off-the-plan property.
Points to consider before buying off-the-plan property
- Check if your financial resources are in place. Investing in off-the-plan property requires long term planning since a considerable time is left in possession. Till the time you get the possession you need to manage your finances very judiciously. Sometimes it is part payment or just booking amount and with that there is EMI if you have bought loan, which might start immediately after booking or as agreed. After that you might need to manage for regular cheques to the builder along with the cost of temporary accommodation in form of rent.
- Research the developer well. Property market in India is still in its developmental phase and is not organized yet. Therefore, you should check the credentials of the developer and his authenticity in the industry. You should check the time for which the developer is in the business and the duration he takes to deliver the project. Besides this also check the details of project and the clauses, if they suit you or not.
- Research the project well. There is not one thing that you need to check about the property you are planning to buy. Along with the lay out plan, also check the time committed by the developer to deliver the project. Many get swayed by the marketers when it is their first home. Do check the possible rental yield, capital returns in long term and third party reviews and feedback.
- Always consider the risk and plan accordingly. When off-the-plan property is involved, the risk is all about its delivery and time taken for it. The developer might take more than the committed years for the delivery and the investors have to bear the brunt of it. So do not plan your finances neck to neck, always keep your plans flexible and keep alternatives ready.
- Get your contracts reviewed by the legal advisor. Buying property is not your everyday business. So it is always in your interest to get the second opinion about the kind of contract the developer is offering you to get the deal done.
- Consider the future prospects of the property. Chances are that you are buying property for your own use; however do consider the future prospects of selling the property. Check the upcoming nearby facilities along with the add-on features the developer is offering to you. How does that appeal to a buyer if you consider its resale? If you think it is a good buy even years later, you can consider investing in it.
Keeping these points in mind can help you to determine whether or not you should consider buying off-the-plan property and help you take a sensible decision.