In the modern day times, the importance of investments and savings have doubled. Times can and will be uncertain. People lose their jobs all the time, industries change, there is a chaotic chaos at all times. The need to have multiple income streams is important than ever. Investments are a great way to save your wealth along with building up a profit. In the market, you will find countless types of investments from bonds to real estate to mutual funds and what not.
Investment in property is a symbol of status and power. For many, real estate investments are a big dream to achieve. Many youthful entrepreneurs decide to look into the flourishing business of the real estate industry. When it comes to real estate investments, the opportunity can be marked as ‘high risk, high reward’ at times since a lot of people are spending their life’s worth of hard-earned money on their investment. Taking the risk of loss is not something anyone would desire.
Different types of real estate investments can have different types of fates in the future. After all, the basis of the real estate business relies on the supply and demand of property by consumers. Therefore an investment into a project can lead to a huge profit for you, or as the property values decline, leave you at the loss of money.
Moreover for those who are looking to invest in property to live their dream lives in can also be benefitted differently depending on the type of property they buy and the situation they are in.
Today we will discuss the two contrasting types of property that can be invested into; on the one hand, we will take a look at under-construction projects that are still in the beginning phases of development, whereas on the other, we will overview already developed housing projects. How do they compare? What are the benefits and drawbacks of each? We aim to answer these queries.
What should we consider to compare both property types?
Delay in development:
One of the obvious major drawbacks of already constructed properties has to be the unexpected delays in the completion of the project. In case you have bought a piece of land in an ongoing construction project, you have not confirmed the project’s completion by any time. This can become alarming, especially for investors who have bought plots in under-construction areas to profit off of developed Property projects as the years pass by. Many ongoing projects may face delays due to not being granted permission by concerned authorities. This is a reason one should always be wary when investing in under-construction projects and should check to see if they are approved or not.
This problem is obviously not going to exist when the built property is bought as it was obviously approved. This reduces the risk of loss upon investment or delay on any profits one may face while investing in unfinished projects.
Comparison of pricing:
This comes as the primary reason why investors are attracted to investing in under-construction projects. The price of under-construction housing schemes is marginally low as compared to already existing projects. The cost of an ongoing project can be lowered up to 30% of the price of a finished one.
This comes at the risk of ending up paying more for finishing an under-construction house as well, just in case a developer or builder faces a problem in finishing it so. On the one hand, you pay less but have to be vigilant; on the other, you pay the price, but you get a finished project. A finished project makes you only go through the legal transfer of ownership and some paperwork which is much more stress-free of a process than overlooking the completion of construction, looking over materials processes, and property visits to keep a keen eye on the property work.
Personalization of property:
Another desirable aspect in favor of investing in an under-construction property is that you can take it into the direction of your own desire, keeping in the legal limitations of construction, of course. The layout of your house can be tailored to your needs. You can push the direction of construction to the requirements of your family. This flexibility in directing construction is not present when investing in constructed projects; you take the brick and mortar structure as is.
Expectations from the property:
An unfinished under construction project or a housing scheme does not show the complete picture of the properties’ fate; on the other hand, well-developed housing projects are an open book to their investors. All the lifestyle facilitation and recreational options available are in front of the investor in case of completed projects. On the other side, for unfinished projects, the landscape of the property and its surroundings can be unexpected and, at times, disappointing. If you are looking to buy the property of your dreams, finished projects mirror the lifestyle you want to live; the unfinished projects may not even have the ideal amenities in their surroundings to live a peaceful and smooth life.
Moreover, if you invest in unfinished projects as an investment opportunity, the finished result may not be that desirable for further investors that can leave you at a loss.
Investing in under-construction projects:
Many new construction projects are going towards steady progress in Pakistan. Day by day, the real estate demand is increasing, and for the supply, the real estate projects are further expanding. Many pre-existing projects are also extending upon their projects to accommodate the ever-increasing demand.
Investing in these under-construction projects comes at the advantage of a lower cost, as previously discussed. Furthermore, buyers of such properties can enjoy the liberation of directing the completion of the project to their heart’s desire. However, these processes do take more time to complete, so individuals who have the time and energy to spend on the property can find themselves at a benefit when investing in under-construction properties. Some under construction projects come with a set of installment plans for investors’ aid that one can take up.
Under construction projects can be good news for business investors can give a greater return on investments as compared to already constructed property. The value of the neighborhood or the housing project this under-construction property is a part of can be greatly increased over time. As for amenities and luxury of the area increase with development, the prices may rocket sky high.
On the flip side, under-construction projects can also flop, leaving hopeful investors at a loss. Those imagining the house of their dreams may also get the imagination of a peaceful community life disrupted by a sudden decline in investment into the project, leaving their dream house stranded. Furthermore, the development in the project may not bring the same status, or facilitation one had hoped for. One may also end up applying for hefty loans for unexpected costs of construction investment they miscalculated.
Investing in Developed property and property projects:
When it comes to developed housing projects, Pakistan is not short of them. Over the years of the rise of the real estate business, the demand has grown at par with the rising standards. Some ren0wned names of Bahria town, DHA, and many more are spread throughout the country. Well-developed projects give a good reflection of the standard of living that can be expected there. All their masterful planning reveals itself to any real estate investor to further advertise their grandeur. All the amenities and luxuries of existing developed projects are already present for the consumer to look at, reflecting the life they will live in upon investment.
Overall we believe that people who are looking to find a property to live under in a state of urgency should always opt for fully constructed projects. This saves them the time it takes for the delay on moving into the property. Under construction projects are often also lone standing properties away located deserted in the construction landscape. Therefore for those who want to enjoy community life, under-construction projects are not the optimal option for them to invest in.
As discussed above, constructed properties give a better view of the availability of facilitation you can enjoy. Constructed projects come with all the basic life facilities of grocery and services as well as recreational amenities like gyms and clubs to enjoy.
After looking over the pros and cons of each of the project types, we believe the decision to invest lies purely on one’s own terms. Depending on your situation, you may find benefit in investment upon either under development projects or may find success through already developed projects.
In a nutshell, those who have the time and financial security would find the opportunity of buying an under constructed property much better. On the contrary, people who want more surety and have an urgent need to invest are better off with constructed projects.