Buying a home in India is not a decision made in a spur of a moment. It is a decision to be taken after much contemplation and research. Some home buyers get confused about whether to go for plans offered by developers or go for a ready to move-in flats. For those who are stuck in this jinx, here is a small analysis.

Ready to move-in flats: Ready to move-in flats are ideal for home buyers who are making their first property investment. This will save them from spending on rentals. The risk factor involved in this category in terms of delays and hassles during construction, is nullified, as the home buyer is getting a ready accommodation. The disadvantage of ready to move-in flats are their prices. They are pitched at higher prices in comparison to the construction and time plans. Higher price also makes the ready to move-in flats less attractive from RoI point of view.

Flats under construction: Developers offer different plans to home buyers depending on the home buyers’ affordability and need. The RoI in these projects is high as they are much affordable compared to the ready to move-in ones. This is ideal for home buyers planning to purchase their second home. The major disadvantage of projects under construction is delays, price escalations, variance from the planned layout, etc. Home buyers opting for these plans for their first home, will have to shell out money not just for their new home which is under construction but also for their rental accommodation.

Various plans offered by developers:

Construction Linked Plan (CLP): In this plan home buyer can play the cost in pre-determined installments to the builder, at various stages of construction. CLP is more expensive compared to the other payment options; as developer is taking a risk on his cash flow (if he is not able to fulfill his construction obligation).

Time Linked Plan (TLP): In this plan the home buyer is required to pay installments at various points of time, irrespective of construction. This plan offers higher rebate compared to CLP.

Down payment Plan (DP): Customer is required to pay around 10-20% of the total value at the time of signing the agreement and balance is to paid on a time period not exceeding 90-120 days or lower. DP promises good discount as full payment helps developers with the much needed cash flow.
 

Flexi payment plan: This plan is a mix of both the down payment plan (DP) and a construction linked plan (CLP).