The 6 BIG Advantages of Investing in Pre-Launch Projects

Congratulations…You have finally decided to buy a home.

This is just the tip of the iceberg. There are as many types of property as there are buyers – while it depends largely on your budget, there are other factors that can influence your purchase. The same budget can buy you several types of homes. So, how do you decide?

Today, we introduce you to the idea of investing in a pre-launch property.

Do you know what it means and how it differs from buying a ready-to-move-in home? If you don’t or even if you have a slight inkling, stick with us as we break down the concept of pre-launch projects in Indian real estate.

We will also explain their advantages, and help you make an informed decision.

What is a Pre-Launch Project?

A pre-launch project refers to the phase where a builder announces a real estate project before obtaining the necessary approvals from regulatory authorities. That is, just before the project is officially launched.

At this stage, the project is basically an idea or a proposal and is often publicized through marketing campaigns to gauge and attract buyers’ attention. Buyers rely on the project’s brochure, floor plans, and developer’s reputation to make their decision. And quite often, builders use this phase to offer properties at discounted prices to attract early buyers.

During the pre-launch phase, buyers need to pay just an initial amount to book homes. This goes quite a long way in helping builders to accumulate funds. They can begin construction as soon as other regulatory approvals are granted, minimizing the need for high-interest loans that may otherwise be required.

And what are the advantages of investing in a pre-launch property?

1. Lower Prices: One of the biggest benefits of pre-launch properties is the pricing advantage. Developers usually offer units at rates quite a bit lower than post-launch prices. This discount can range from 10% to 30%, making it a very attractive option for buyers, as they save on costs.
2. Capital Appreciation: Pre-launch investments often yield high returns due to price appreciation by the time the project is completed. As property prices rise, the value of your investment increases, offering a good profit margin if you choose to sell.
3. More Options: Pre-launch buyers can choose from the best available units. Whether it’s a corner apartment, a garden-facing unit, or a flat with the best view, early buyers have the advantage of picking their preferred options. In addition, buyers have the flexibility to choose and change (if they so desire) the layouts, interiors, and other features during the construction phase.
4. Modern Amenities & Added Features: Pre-launch projects typically include modern amenities and facilities. Developers often ensure that these projects align with current market demands, offering features like green spaces, recreational areas, and advanced security systems. Features such as modular kitchens, furnishings or even gifts such as automobiles are also quite common add-ons during this phase.
5. Reduced Financial Pressure: Investing during the pre-launch phase means staggered payment plans, giving buyers more time to arrange funds. This flexibility makes it easier for those who need to plan their finances.
6. Tax Benefits: Homebuyers who purchase under-construction properties can claim tax deductions on their home loan interest under Section 24(b) of the Income Tax Act. This benefit can be availed once the construction is complete and possession is taken, making it a financially prudent option for buyers.

What is a Ready-to-Move-in Property?

On the other hand, a ready-to-move-in property is a completed (or ready-to-occupy) residential unit where construction is finished, and all regulatory approvals are in place.

Buyers can inspect the property physically before making a purchase. Technically speaking, they can move in immediately after completing the transaction, though practically, the interiors will need to be finished as per their tastes.

1. Immediate Possession: Buyers can move in or rent out the property immediately after purchase. There’s no waiting for construction to be completed, making these properties ideal for those needing a home urgently.
2. Reduced Risk: Since construction is complete, the risk of delays or project non-completion is eliminated.
3. Higher Prices: Ready-to-move-in properties are generally priced higher due to construction and financing costs incurred by the developer.
4. Limited Choices: Most units may already be sold, leaving fewer options to choose from.

Risks in Pre-Launch Investments

While pre-launch properties offer many benefits, they also come with some risks such as delayed possession. Buyers must wait for construction to finish, which may take several years depending on the project. Also, the lack of regulatory approvals at this stage makes due diligence critical.

To mitigate these risks, buyers should:

1. Verify the Builder’s Reputation: Research the developer’s track record for delivering projects on time and as promised.
2. Check Regulatory Compliance: Ensure the project has the necessary approvals and a valid RERA registration number. This ensures legal compliance and minimizes the risk of fraud.
3. Inspect Land Documents: Verify the legality of the land and its ownership. Engage a legal expert to review all related documents.
4. Avoid Large Upfront Payments: Make payments in stages to reduce financial risk. This ensures that your investment aligns with the project’s progress.
5. Assess the Location: Evaluate the area’s development prospects, infrastructure, and connectivity to ensure long-term value.

Why Pre-Launch Projects May Be the Better Option

For buyers who need time to plan their finances, pre-launch properties offer several advantages. The lower entry price and the higher potential for appreciation make them a preferred choice for investors and homebuyers. Additionally, the flexible payment structures provided by developers during this phase make it easier to manage financial commitments.

On the other hand, ready-to-move-in properties are ideal for those who need immediate housing and prefer to avoid the risks associated with under-construction projects. However, they often come at a premium price and may not offer as much room for customization.

In conclusion, pre-launch properties offer affordability, flexibility, and higher investment potential, making them an attractive option. However, as with any investment, due diligence is essential. Ensure that the developer has a proven track record, and the project is compliant with regulatory requirements to minimize risks and maximize benefits. By doing so, you can turn your dream of owning a home into a rewarding reality.

Of course, you can also take the no-hassle route and just contact Team Save Max!!!