There is no denying the fact that a couple of years gone by has instilled a sense of insecurity in the minds of realty investors. However, that reluctance was short-term and the industry is looking at a full-scale recovery. Despite this, there remains a dilemma as to which property type is better?

Ready-to-move-in or the under-construction one? As the year 2022 will be the flagbearer year for the sustainable recovery of the housing sector, investing in an under-construction property would fetch some excellent returns in the long term. Let us analyze why?

Low Input Cost

As the real estate sector is trying to get on its feet, the real estate developers are rolling out attractive offers and largesse to attract homebuyers. As the under-construction projects take time to complete, an investor can book a property with only 5-10 percent of the actual cost and the remaining can be paid in phases or as per the deferred payment plan of the developer.

In this way, the input cost is only a fraction of the amount that would have been used in the acquisition of a ready-to-move-in housing unit. In 2022, the developers are more willing than ever to invite the investors, therefore, the investors must consider under-construction property ownership.

Affordable Interest Rates

As the economy is recovering from the pangs of an unprecedented pandemic, the credit disbursal is also picking up the pace and the rates of interest on the housing loan is at the lowest of all time. While the nationalized banks are offering home loans in the range of 6.50-10 percent, the Non-Banking Finance Companies (NBFCs) are offering home loans at 6.90 to 12 percent.

This makes it an opportune time for the investors to avail of the benefit of low-interest rates and make an investment in under-construction properties. Moreover, the home loan can be synced with the payment plan of the developers so that the instalment is released when the construction phases are completed.

High Returns Potential

As the economy is recovering from a formidable challenge, the pace of growth will be tremendous in the coming decade. According to Moody’s estimate, the Indian economy is expected to grow at 9.1 percent in the coming year. This forecast displays the potential of the Indian economy. If the real estate investors consider an under-construction property, the rate of returns will be excellent on a 7-10 years timescale.

In addition to the residential segment, commercial real estate investment is also catching up. If earning a rental income is the sole purpose of investment, you can also consider an under-construction commercial property.

Attractive Offers

In order to woo potential homebuyers, the reputed real estate developers are offering attractive discounts, free furnishings, low booking amounts, stamp duty rebates, deferred payment plans (often construction linked), group discounts, and free club facilities for a specified time. The developers are doing this to attract serious buyers and encourage them to consider the project from a long-term investment perspective. Those investors who want to earn a rental income after some year can start with an initial investment and once completed, the investment might turn out to be a workhorse.

Conclusively, the year 2022 offers a unique opportunity for real estate investors to invest in an under-construction property as the initial investment cost is low, and there is a multitude of options to choose from. However, factors such as location, the reputation of the developer, RERA registration and connectivity must be kept in mind before investing in an under-construction property.

Also Read: 6 Tips to Save on Construction Cost

The post Should you invest in under-construction properties to get high ROI in 2022-23? appeared first on Square Feat India.

Buying a home is that one dream which is harboured by every young man or woman. Many people take a lifetime to buy their own house, some achieve it early in their careers. While young, most of the working professionals do not think about owning a home. However, if they start taking the baby steps towards owning an abode early in their career, they might own property very soon. Here is a lowdown on why one should plan and go for a property investment early in their career.

Lower EMIs– When you are young, there is ample time for you to pay back the home loan. When you are in your mid-20s (20-25 years), you can easily avail of a home loan of 20 plus years. The financial institutions are also willing to offer longer-term loans. With a working life of 25 plus years, you will own your sweet home early in life.

Moreover, as you grow in your career and the salaries get better, you can easily prepay the loan to get debt-free. At a time when you are unmarried, have no children and have limited liabilities can turn out to be the best time to invest in a property. A property investment in your 20s might turn out to be the best decision of your life.

Tax Benefits– When you are earning well, tax benefits and tax savings are a top priority. The acquisition of a property early in your career can support you in saving a significant amount of tax. When you take a home loan to acquire a property, it is eligible for tax benefits under Section 80 C of the Income Tax Act. A home loan comes with multiple tax benefits for a homebuyer. When you are young and invest in an under-construction home, you are eligible for a pre-construction interest rebate and can claim a deduction on the interest paid on the home loan.

According to the Income-tax Rules, deduction in five instalments, from the date when the property is acquired or construction is complete, is allowed under the IT act. However, the maximum deduction is capped at Rs 2 lakh. If your home loan falls under the ambit of section 80EEA, you can also claim an additional Rs 1.5 lakh claim.

Asset Acquisition– Buying a property at an early age will make you the owner of a reliable and appreciating asset. At the back of your mind, you can rest assured that even if nothing works out, you have an asset to bank upon. If you purchase land in your 20s, its value will appreciate and the ROI will be exponential after 10-15 years.

Rent Saving- If you have decided to invest in a home early in your career, it can save a significant amount of rent for you. When you acquire a home, you can avail of a home loan and the money that would have gone into rent can be utilized in the form of Equated Monthly Installments (EMIs). With the passage of time, the amount of EMIs also reduces, the loan gets reduced and eventually, you get your own home very early in your life.

Conclusively, a property investment early in your career is a wise decision, given the income range and other aspects are appropriately covered. However, experts caution that youngsters must weigh in all the factors before going for a home loan as in cases of job loss or recession or any unforeseen jib loss, the situation might get tough and repayment might be difficult. If you have your basic needs duly covered, you can go for a property.

Note: Annuj Goel, is MD, Goel Ganga Developments, views expressed solely belong to the author and do not represent that of SquareFeatIndia.

Also Read: RBI’s Repo Rate Hike may impact real estate demand: Realtors

The post Would it be wise to invest in a home early in your career? appeared first on Square Feat India.