So here are some pros and cons of making investments in different phases of a project.
Benefits of investing in the first phase of a project
Investing in early phase or first phase of the construction gives the buyer benefit of buying at a much lower price. And hence developers also get the chance to successfully sell about 20 to 25 percent of the inventory at a special price.
But necessarily gather all relevant information about the respective project. Double check the builder’s credibility, check the builder’s past track record of delivering projects on time. If the builder has a clean track record then the buyer can definitely go ahead and invest in the early stage of a project
At times when certain parts of the projects get sold in the first phase, the builder sells the inventories in the later phases at a much higher value. So, if the buyer invests in an early phase, then he or she could get a much better deal.
Then the other factors are involved such as policy changes. Buyers usually don’t get impacted by policy changes but developers might get affected. Building a project is a very long process hence various approvals take time. So some developers take approvals on a partial basis during the various phase of the construction. Therefore sudden policy changes like certain tax implementation impact developers that in return can impact the buyers. For instance, if the buyer purchases an under construction property after implementation of GST then he or she has to pay as per the new GST rate and not the previous service tax.
Benefits of investing in the later stage or in second or third phase of the project
One of the important advantages of investing in the later phase of the project is the buyer could get to see the overall progress of the project. The buyers could also be assured about the speed of the construction and whether it would be finished as per the deadline. As investing in projects near completion are the safest choices to make.
During the first phase the buyers might miss out on the background check but in the later phase when the construction is in full swing, the buyer could check whether all the relevant approvals and clearances are in place or not.