At what stage should you invest in property?

At what stage should you buy property? Would investing in the pre-launch stage of the project give you better returns? What are the risks involved? For an investor or an end-user, especially those buying for the first time, deciding the right time to buy a house is a major concern. To advise users, Magicbricks organised a live chat session, GuruTalk, with Om Ahuja, CEO, Residential Services, JLL India. Topic of the discussion was – “What stage of project should I invest – launch, completion or re-sale?”

“You can enter a project at any stage. But those buying property for the first time, for themselves, need to consider how long they can afford to stay on rent. As a rule, the lowest entry point is at the beginning, but this also implies the longest waiting period until actual possession,” says Ahuja.

There are various stages of investing – pre-launch, launch, completion and re-sale. All stages demand different sums of initial investment and certain time period for property investment to mature into a profitable venture.

Pre-launch/soft launch stage

Projects in the pre-launch or soft launch stage generally involve the risk of approvals. The Authority permissions for projects remain in progress during this phase. Hence, there could be a price difference from the other properties in the market.

So what should one check before investing during this stage? Ahuja says, “First, the credibility of the developer and his track-record for timely completions. Secondly, check the quoted price – whether it is a real bargain as against exiting property rates for the area in question. Thirdly, look at all available options within that location that fit your budget”.

Launch stage

The best time for investing in a newly launched project is at the time of the official announcement. “At this stage the developer would have got all or most of the clearances and a sample flat would also be ready,” explains Ahuja.

“This stage of investment potentially delivers better returns because this would be the time at which the project pricing would be at its lowest,” further added Ahuja.

Are there any risks involved? “The potential risks of investing in the launch stage include the possibility of the project not getting completed on time and changes in the apartment size and specifications along the way for any reason,” says Ahuja.

Completion stage

There are no problems with investing at the completion stage – in fact this is the least risky stage to invest in a project. However, Ahuja says that the rates would be significantly higher than at the launch stage. This is a personal call one needs to take. If you are buying for personal use rather than for investment, the completion stage may be a better entry point.”

Investment in re-sale property

The choice of whether to buy a property in a new project or to buy a re-sale property is very subjective. However, Ahuja says there are two advantages in buying re-sale property. Firstly, it is possible to get a property in a good location where no new supply is coming up.” Secondly, these are mostly ready-to-move-in units thus, ‘what you see is what you get’ is applicable. In other words, there would be no untoward surprises.

So is it a good time to invest? “The best approach is to not time the market, but invest as soon as a suitable property presents itself at the right time and at the right price. Real estate will always appreciate in the long run and the best options available today may no longer be around at a later stage,” suggests Ahuja.

Source: content.magicbricks.com/industry-news/at-what-stage-should-you-invest-in-property/79308.html