Lucknow is bustling with pre-launch properties. Pre-launch properties refer to projects that are conceptualised but are still waiting for regulatory approvals. Real estate developers offer such a project at a discounted price to some selected investors, hence called pre-launch projects.
Like other properties, a pre-launch property has its fair share of benefits and risks. In this blog, we will examine the benefits and risks of buying residential flats in Lucknow before their launch.
Benefits and risks of buying a pre-launch project in Lucknow
Let’s look at both the aspects one by one.
Benefits of a pre-launch property:
Cheaper/lower prices
A pre-launch project is known to attract investors by offering a cheaper price than finished projects in the market. A pre-launch sale offer can help real estate companies attract more investors. Buyers of such a property will probably get a better deal than others.
Early access & desired selection
Investing in pre-launch properties gives investors early access to various units. They can select their desired unit and negotiate their terms with the dealer for a better deal. You can choose a desired direction with the best view. New launch project also gives interior modification flexibilities.
Higher ROI
Since pre-launch properties are sold for a discounted price, investors have an opportunity to gain higher returns. As the project progresses, the price keeps on increasing. Also, the circle rate keeps on changing, which ultimately leads to price increases. So, investors have a great opportunity here to get attractive returns.
Simplified payment options
Builders provide flexible payment options on pre-launch properties, which relieves investors’ burdens. They also offer certain schemes that suspend the EMI payment until the project is complete and ready for possession. This provides great relief to investors, who only need to pay 20-25% of the cost at the initial stage, further boosting affordability.
Protection against price hikes
As said earlier, real estate property prices increase with time. Investing in a pre-launch project protects you from price increases. You can lock the price right initially and safeguard your funds from future price hikes.
Risks involved in a pre-launch property investment
Delay in completion and possession
Investing in a pre-launch project may put you at risk of being delayed in possession. In most scenarios, real estate builders are required to fix a timeline for completion and possession. However, delay may occur for any reason. RERA guidelines clearly suggest that the builder must complete the project on time. A delayed project may cause you mental agony and disturb your financial goals.
Builders may default
When builders are not able to finish the project on time, they may be defaulted due to legalities or financial issues. This impacts investors badly. It becomes hard to know when it will be completed in the future.
No immediate rental income
Investors cannot generate immediate rental income as they don’t acquire possession of a pre-launch property. They will have to wait until the project is complete.
Conclusion
The real estate is buzzing with pre-launch properties. While the investment in such a property exposes you to certain risks, it also has certain benefits that you can use to your advantage. Before investing in a pre-launch project, it is advisable to check all the pros and cons and the builder’s credibility. Consider all the factors, including due diligence to make a final call.
