December 13, 2019 | By Economic Times
Ready to move in homes - this is a term that every new and experienced homebuyer is often seen studying. In a country like India, home buying is much more of an emotional and personal milestone than an economic one. Which is why choosing between a ready-to-move-in home and an under-construction apartment is never easy. It not only decides when you can finally experience the “first home” or “own house” feeling but also determines multiple aspects of your financial portfolio and future.
A ready-to-move-in home or RTMI home is one which is ready for possession with the certifications like Completion and Occupancy Certificates, varied amenities and everything else in place. Whatever the history of the house may be, the biggest advantage of buying an RTMI house is its quick and easy possession. If you are a first-time home-buyer or looking at relocating to a bigger apartment, a ready-to-move-in house can prove to be hassle-free, making home buying a pleasurable task.
The Risk Appetite
The first and most important point to consider when buying a house is your ability to take risks. While realty is one of the most secure investments - there are various aspects that increase the risk value. From interiors and handiwork to the long possession period of an under-construction home, several moments may challenge your risk-taking appetite.
When you invest in an under-construction project that costs less, the chances of delay in the possession of the house should be thought about seriously. In such cases, home loan EMIs often begin irrespective of the delay in projects, biting into monthly budgets. If you are a first-time home-buyer who is currently living in a rental, chances are you will have to shell out the added EMI cost, while continuing to live on rent, with an added uncertainty of the date of possession. This problem does not come into play in an RTMI home, as we can easily inspect the house, estimate and alter the interiors of the house or even minimise the investments we make on furniture, etc, based on our own risk-taking abilities.
The Power of Now
Buying the first house is a big step. With an RTMI home, you can take this step with immediate gratification. Typically, RTMI homes are more expensive than under-construction options, but the fact that they are available instantly compensates for the difference in the price. Whether you want to take note of the neighbours in the society, examine the amenities that are available close by, or want to check the accessibility of schools, colleges, hospitals, supermarkets, etc from the prospective house, the answers are crystal clear when it comes to RTMI Homes.
In under-construction homes, this clarity can be amiss. More often than not these projects may only have a sample flat in place, or an online make of what the society may look like. If you are a family person looking for the ‘first home’ experience where you can watch your kids grow old and make memories, the ‘power of now’ that comes with RTMI homes can be exhilarating.
The price debate
While the slightly higher cost of RTMI homes used to be problematic until a few years ago, the recent trends in the real estate sector is seeing the winds shift. Most people invested in under-construction homes for the surge in their value after completion. However, with rising competition and more inventory being added, the chance of a sudden price jump is also diminishing.
The fact that RTMI homes also come with the benefit of no GST, helps people save an additional 5% tax that they otherwise pay for under-construction property. In addition to this, RTMI homes let you the immediate tax benefits over home loan premiums (both principal and interest). All these benefits ensure that the payback on an RTMI home is actually higher.
The right choice for the second-time home-buyer
First-time home-buyers often go for RTMI homes as they are low on risk, readily available for possession, and easy to inspect. But with the Indian real estate market turning towards an era where home-buyers are looking for houses that can accommodate them and their family rather than as investment options, this sentiment resonates with second-home buyers as well.
Most second homes serve either as family homes in a different city or a refuge for kids who want are starting to build their own life independently. Due to this trend, most buyers look for a house that is possession-ready. Even those who are looking to buy a second home as a source of income also take this call as they can immediately rent out the RTMI home and start matching their home loan EMIs, or, in some cases, even make a profit over it!
All these points make it clear that an RTMI home is the illustrious choice for not only new home-buyers but also the investors looking to buy a second home. A 2019 ANAROCK report shows that of the 6.56 lakh units lying unsold across the top 7 Indian cities, only 12% (81,300 units) are ready-to-move-in. This indicates a trend in the Indian realty sector that is leaning more and more towards RTMI homes. If you are a home buyer, now you know how to make an informed decision.