INTRODUCTION: Buying a property in the buzzing Goan real estate market demands careful scrutiny of a host of parameters: Return On Investment, Allocation of Budget, CRZ Compliance and Type of Property. When an individual decides to purchase a property in Goa, they need to make a decision about which type of property to invest in? The question that comes to their mind is Should they aim for an Under-construction property or settle for a ready-to-move-in (RTMI) apartment?
The purchaser is marooned between these two choices and the buying decision is dependent on a number of financial, legal and personal determinants. These decisions are all the more critical since they influence the buyer’s returns on investment and lifestyle.
This guide analyzes both these options and helps in making a wise decision tailored to buyer’s specific needs and circumstances.
UNDER-CONSTRUCTION PROPERTIES: THE INVESTMENT OPPORTUNITY
What Are Under-Construction Properties? An under-construction property (also known as new launch) is a residential unit which is still being developed. When a buyer purchases such a property from the developer, it is still going through various phases of construction such as foundation, erecting columns and concreting.
ADVANTAGES OF PURCHASING AN UNDER-CONSTRUCTION PROPERTY
FLEXIBLE PAYMENT PLANS: The reason why under-construction properties are so popular among buyers is pliability with respect to payment structure.
- PHASED PAYMENT PLANS: In this structure, payment schedules are attached to construction milestones (foundation, structure completion, finishing stages). The advantage here is that the buyer can distribute his payment schedule over a period of 3 to 4 years, subject to the developer’s terms of payment.
- MINIMAL DOWN PAYMENT: Banks follow a 80%-20% formula while disbursing home-loans. Initial downpayments start from 20 percent and the rest of the price is funded by the financial institution depending on their terms and conditions.
- POST-COMPLETION FLEXIBILITY: Some builders offer certain benefits exclusively to first-time buyers such as payment extension uptill post-completion so that they can fulfill their dream of staying in their own home.
- FINANCIAL ADVANTAGE: The 80%-20% payment schedule provides a decisive advantage to the buyer. To cite an example: For a 50 Lakh property, the buyer has to only pay 10 Lakh upfront as per the payment schedule. This way the buyer can free up capital for other investments or emergencies. Such flexibility can be availed for under-construction properties only.
CUSTOMIZATION AND FLEXIBILITY:
- INTERIOR CHOICES : The decisive advantage with under-construction properties is that the buyers can customize their wall colours, flooring, kitchen design and overall layout of their apartment subject to the prior approval of the builder.
- UNIT SELECTION: With a UC property, buyers get the privilege of selecting their units based of their preferences - sea-facing, floor level and type (2BHK or 3BHK). In the case of a newly launched property buyers can play with a lot of options.
CAPITAL APPRECIATION POTENTIAL
- HIGHER RETURN ON INVESTMENT (ROI): An under-construction property appreciates at a much faster rate in comparison to an RTMI one. The appreciation rate is generally 15-40% by the time of completion.
READY-TO-MOVE-IN PROPERTIES: THE CONVENIENCE FACTOR
What Are Ready-To-Move-In (RTMI) Properties? As the name suggests, an RTMI property is one which is fully-constructed and buyer can start staying there with minimal final touches.
KEY ADVANTAGES OF RTMI PROPERTIES
1. IMMEDIATE POSSESSION:
- NO WAITING PERIOD: The striking advantage of owning an RTMI property is that it doesn’t have a waiting period and buyer can take possession within days of registration.
- INSTANT OCCUPANCY: An RTMI property comes with an already-issued “Occupancy Certificate”, which means owners can start generating rental income right away.
- PRACTICAL BENEFIT: An RTMI property is an ideal bet for Expat Indians since it resolves the issue of immediate housing for expats looking to relocate to Goa.
NO CONSTRUCTION RISK
- VERIFIED QUALITY: The prospective buyer can crosscheck on the quality of the work before making the purchase.
- TRANSPARENT PRICING: An RTMI property is refrained from GST and this works as an advantage for the buyer.
IMMEDIATE RENTAL INCOME POTENTIAL
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- CASH FLOW FROM DAY ONE: RTMI properties are preferred by those buyers who purchase properties purely for investment purposes.
- HIGHER RENTAL YIELD: The Goan Property Market is very bullish for fully-furnished RTMI properties which fetch premium rental rates.
WHAT YOU SEE IS WHAT YOU GET:
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- PHYSICAL VERIFICATION: Buyers can physically verify if there are any minor touch-ups that need to be done before purchase.
- CLEAR TITLE VERIFICATION: A property with an RTMI status suggests that all the approvals from the relevant authorities have been acquired and there are no title complications.
THE DEEP COMPARISON: FACTORS BEYOND PAYMENT PLANS
| Sl. No | Parameters | UNDER-CONSTRUCTION | READY-TO-MOVE-IN (RTMI) |
1. |
Timeline and Commitment | Requires 3-4 years of patience | Immediate Occupancy |
| Ideal for Long-term investors with time on their side | Ideal for those needing immediate accommodation or investors seeking quick rental returns | ||
| 2. | Financial Liquidity | Stage-wise payments means better cash flow management for buyers | You purchase at current market rates, which are realistic |
| 3. | Quality and Construction Standards
| Buyer can personally visit the site on frequent basis to check the status of the work | Buyer can get any annuities and finishes tested before the purchase |
| 4. | Financing Options
| Progressive Funding: Home loans are released in tranches based on construction stages
| Full Loan Amount: Entire loan disbursed at once
|
| 5, | Taxation Implications | Section 80C Benefits: Deductions available during loan repayment period
| Immediate Depreciation: If rented out, depreciation benefits available immediately
|
WHY OPT FOR UNDER-CONSTRUCTION IN GOA?
- Emerging Markets: Areas like Dabolim, Zuarinagar and Margao (In South Goa) are developing rapidly and there is huge price appreciation for those who buy early.
- Rental Demand: Goa’s reputation as a tourism destination as well as its growing status as an industrial hub has led to massive influx of people who are looking for rental properties.
- COST ADVANTAGE: An under-construction property cots 20-30% lower than RTMI properties.
WHY OPT FOR RTMI IN GOA?
- INSTANT RENTAL INCOME: The best reward for purchasing an RTMI property is instant rental income.
- Expat Demand: NRIs looking for a property in Goa and Retirees from aboard moving into Goa prefer to purchase an RTMI property due to the benefits of owning one.
- HOLIDAY HOME MARKET: There is a expanding market for holiday homes in Goa and those who seek one are interested in RTMI only.
CONCLUSION: To conclude, it can be asserted that choosing between Under-construction or RTMI is a matter of personal choice. Some buyers prefer higher appreciation with under-construction projects or immediate rental returns from ready-to-move homes. The ideal Goa property investment ultimately depends upon the buyer’s personal financial timeline and risk appetite.
