When buying a home, one of the most crucial decisions is choosing between a ready-to-move (RTM) property and an under-construction (UC) property. Each option has its own benefits and drawbacks, which can significantly impact an individual’s finances, lifestyle, and long-term investment goals.
In India, the choice between RTM and UC properties largely depends on factors such as budget, risk appetite, waiting period, and financial planning. The Indian real estate market has evolved over the years, with regulations such as RERA (Real Estate Regulation and Development Act) bringing more transparency into property transactions. However, homebuyers still face a dilemma when selecting the right type of property.
This blog provides an in-depth analysis of both property types to help you make an informed decision.
Understanding Ready-to-Move Properties
A ready-to-move property is one that has been fully constructed and is available for immediate occupancy. Such properties are typically completed with all necessary legal clearances, amenities, and facilities.
Advantages of Ready-to-Move Properties
- Immediate Possession: Since construction is complete, buyers can move in immediately after making the payment and completing the formalities.
- No Construction Delay Risks: Unlike UC properties, RTM homes do not face uncertainties related to construction delays due to funding issues, regulatory approvals, or unforeseen circumstances.
- Certainty of What You Get: Buyers can physically inspect the property, evaluate the construction quality, and assess the surroundings before purchasing.
- Exemption from GST: RTM properties are exempt from Goods and Services Tax (GST), leading to cost savings compared to UC properties, which attract a 5% GST.
- Established Infrastructure: These properties are often located in well-developed areas with existing infrastructure such as roads, schools, hospitals, and markets.
Disadvantages of Ready-to-Move Properties
- Higher Cost: RTM properties are generally more expensive than UC properties due to the premium charged for immediate possession.
- Limited Customisation: Buyers have limited scope for modifications in the layout, interiors, and structural aspects of the property.
- Lower Return on Investment (ROI): The price appreciation potential is lower as most of the value is already factored in at the time of purchase.
- Older Construction Quality: Some RTM properties, particularly resale homes, might not have the latest construction standards or modern amenities.
Understanding Under-Construction Properties
An under-construction property refers to a housing project that is still in the development phase and is available for booking at different stages of completion.
Advantages of Under-Construction Properties
- Lower Price Point: UC properties are more affordable than RTM properties, allowing buyers to invest in a larger or better-located property within the same budget.
- Higher ROI Potential: The property value appreciates as construction progresses, leading to potential capital gains for early investors.
- Flexible Payment Plans: Developers offer various payment schemes such as construction-linked plans, subvention schemes, and staggered payment options, easing the financial burden on buyers.
- Customisation Options: Buyers often have the flexibility to choose finishes, fittings, and even minor structural modifications.
- Modern Amenities: Newer projects come equipped with contemporary facilities such as smart home features, eco-friendly infrastructure, and upgraded security systems.
Disadvantages of Under-Construction Properties
- Possession Delays: Despite RERA regulations, construction delays are still common due to funding shortages, regulatory hurdles, or unforeseen challenges.
- GST and Other Taxes: Buyers must pay 5% GST on UC properties, which increases the overall cost.
- Uncertainty in Quality: The final construction quality may differ from the promised specifications, leading to potential disputes.
- Risk of Project Abandonment: In extreme cases, developers may face insolvency, leaving projects incomplete and buyers in financial distress.
- Rental Expenses: Buyers who are living in rented accommodation must continue paying rent until the property is completed, leading to additional financial strain.
Ready-to-Move vs Under-Construction Properties
| Factor |
Ready-to-Move (RTM) |
Under-Construction (UC) |
| Possession Time |
Immediate |
Typically 2–5 years |
| Risk of Delay |
None |
High |
| Cost |
Higher |
Lower |
| GST Applicable |
No |
Yes (5%) |
| Customization |
Limited |
Possible |
| ROI Potential |
Lower |
Higher |
| Payment Flexibility |
Limited |
Flexible Plans |
| Construction Quality Assurance |
Assured (visible) |
Uncertain until completion |
| Rental Costs |
None (if self-use) |
Ongoing till possession |
| Legal Compliance Risks |
Low |
Moderate to High |
Which One Should You Choose?
The decision between RTM and UC properties depends on various factors:
- If You Want Immediate Occupancy: A RTM property is ideal if you do not wish to wait for possession and want to move in immediately.
- If Budget is a Constraint: UC properties tend to be more affordable, making them suitable for buyers looking for cost-effective options.
- If Investment is the Goal: UC properties have a better chance of appreciation, offering a higher return on investment over time.
- If Risk Aversion is a Priority: RTM properties have minimal risks compared to UC properties, which come with uncertainties.
- If You Need Flexibility in Payments: UC properties provide more payment options, reducing the financial burden on buyers.
- If You Are Concerned About Quality: RTM properties allow physical inspection, ensuring you get exactly what you see.
Legal and Regulatory Aspects
Buyers should conduct thorough due diligence before purchasing either type of property. Some key legal aspects include:
- RERA Registration: Ensure that the property (especially UC) is registered under RERA, providing better transparency and legal recourse.
- Title and Ownership Verification: Check land titles and ownership documents to avoid future disputes.
- Completion Certificate (CC) & Occupancy Certificate (OC): RTM properties must have these certificates to confirm legal occupancy status.
- Builder Reputation: Research the developer’s track record to assess reliability and timely delivery.
- Home Loan Considerations: UC properties may have pre-approved loans, but buyers should compare loan terms before committing.
Both RTM and UC properties have their own merits and drawbacks. Buyers must evaluate their priorities, financial situation, and long-term plans before making a decision. If immediate possession, low risk, and assurance of quality are your primary concerns, a RTM property is the better choice. On the other hand, if you are looking for affordability, higher ROI potential, and customisation flexibility, a UC property is worth considering.
By carefully assessing your needs and conducting proper due diligence, you can make an informed choice that aligns with your home-buying goals in India’s dynamic real estate market.
