An investor’s dilemma in the sphere of real estate

0
130

Home sweet home is a dream come true for all. The sweetness here does come with certain bitter questions and confusions to be addressed. One of the crucial purchase decisions taken by an individual in his lifetime would be one that relates to houses. An investor has two options at this juncture. He can either go for buying a ready-to-move-in house or a building under construction. Observing the purchasing behavior of wise investors, they go for the former.

There are several dimensions of reasons why investors go for purchasing a ready-to-occupy house and why not a house under construction.

  • Instant access: Compared to the delay in acquiring the possession of a building under construction, there is a real-time possession in ready-to-move-in houses. This also averts the risk of project delays due to a shortage of funds.
  • Rental income: An investor, if he chooses to rent out the building, can earn rent. This rent can aid in repaying the debts taken to acquire the building and can also increase his discretionary income.
  • Tax advantage: An investor is entitled to receive tax benefits on loans taken when he chooses to buy a ready-to-move-in house. This benefit cannot be availed for buildings under construction until he takes possession of the property, which may take years to be handed over.
  • Ready-to-use amenities: The concept of a house as a mere source of shelter has waned. A lot of value is attached to the additional facilities like gym and swimming pool. The accessibility to these facilities is immediate in a ready-to-move-in house. He has the privilege to assess the quality of these facilities before making purchase decisions. Such advantages remain out of reach for an investor of a project under construction.

The real estate market is characterized by its dynamic nature and its uncertainty. The cost of construction may go up, there can be scarce labor supply which can lead to delays in project completion. These risks prompt buyers to opt for choosing ready-to-move-in homes. Here an investor is entitled to benefit of critically evaluating the building and also the surrounding environment before reaching a decision. It makes sense to investors for acquiring a ready-for-possession project rather than to wait for a project which would take years for its completion.

“A bird in the hand is worth two in the bush” can aptly be related to the reason why investors go for a completed project than a project to be completed. A finished project entitles the investor to a benefit of a 360-degree check before buying, while in an ongoing project, come what may, the investor has to adapt to it.

Follow and connect with us on Facebook, LinkedIn & Twitter

LEAVE A REPLY

Please enter your comment!
Please enter your name here