Investing in a project during its new launch stage can be financially rewarding since the property is about 20-30 per cent cheaper than the ready-to-move developments. However, there are inherent risks involved. This blog will highlight the benefits and risks of buying a new launch property.
What is a New Launch Project?
New launch refers to the period when the building project is announced. Buying a property in its new launch stage is undoubtedly a good deal for buyers and investors. Many developers offer new launch properties to raise funds before final approvals. This way, they avoid borrowing money from the market at a higher interest rate.
Benefits of Buying a New Launch Property
When you buy a property during its launch phase, you get to choose the desired floor, unit, view, direction, interior modifications, etc. This brings your dream home or workspace closer to reality. Once the building is fully done, making changes isn't easy. Clearly, more options are available during this phase, and you can avoid compromises.
Buying a property during the new launch phase opens the opportunity to get the best return on investment. You can take advantage of the price escalation that happens after the new launch phase. Once the building is up for possession, the prices tend to rise. So if you plan to sell off, you can make huge returns. Also, if you plan to allocate more funds to real estate investment, now is the time to put your money.
Enjoy Best Deals
To attract homebuyers and investors during the initial phase of the project, real estate developers offer attractive price discounts on newly launched projects. If you're looking to invest or buy a home, this is the best time to secure your dream home at the best price. Also, if you want to invest in a low-cost property, consider a new launch project.
Risks of Buying a New Launch Property
Delays and cancellations
Potential delays or cancellations are one of the biggest risks of buying a new launch property. This can occur if the developer runs into funding issues, encounters regulatory hurdles, or experiences construction delays. If the development is cancelled, buyers may lose their deposit and any money paid towards purchasing the property.
Buyers purchase a unit based on plans and artist renderings when buying a new launch property. Thus, the quality of the finished product may not meet expectations. In some cases, buyers find that the finished unit doesn't even match the plans the developer showed them during the launch phase.
Limited resale options
users may have limited resale options if they decide to sell their new launch unit before the development is complete. This is because the property is incomplete, and the value has not yet been established. As a result, buyers may need to hold onto the property until the development is complete to sell it for a profit.
What should buyers do?
Although buying a new launch property is risky, the price advantage continues to be a major attraction for both investors and homebuyers, especially those not seeking early possession.
However, before investing, buyers must ensure that the project has a Commencement Certificate (CC) and Intimation of Disapproval (IOD). The IOD contains instructions that a developer needs to follow in order to construct the building legally.
It's also necessary to establish the trustworthiness of the builder. This includes investigating their track record for transparent dealings, compliance with legal formalities and the magnitude of experience they have in the industry.
Ultimately, it all comes down to the developer's market reputation. According to experts, buyers can be assured of a safe investment if a reputed developer launches a project. Even if the project gets delayed, buyers can expect to receive their apartments eventually. Thus, buying a new launch property can be a great investment opportunity for those willing to take on some risk.
PropertyAngel is a leading O2O (online-to-offline) second landlord platform. We are a Bangalore-based property management company offering professional property management for individual apartments, houses, and villas. Contact us at (91-80-47095974) or (91-7406484455) if you need guidance on how to invest in the right property in Bangalore.