Benefits of Investing in Pre-Launch Residential Projects

Developers need initial capital to launch their project, lay the foundation and start the construction. Currently, lending capital by banks to realty sector is backsliding and in a low phase due to high interest rates of funding and non-eligibility of developers to fulfill the norms. Hence the only way to generate interest free capital is from pre launch of project.

Pre launch is an event when a developer informs an inner circle of brokers and investors of the availability of properties in a project that has not been officially put on the market. The information spreads vocally and via email, but does not figure on the developer’s website or in other marketing medium.

The price advantage of buying a property at the pre-launch stage can be between 5-20%, depending on various market factors. However, nothing comes easy, as investing in pre launched projects is dicey and risk bearing. Generally buyers who exhibit interest for pre-launch projects are usually calculating investors and end-users who seek to benefit from the price advantage and can wait for a couple of years before getting possession of their flats.

Here are few points you should remember before opting to invest in a pre launched project:

• The project may not be cleared for home loan approvals, or the developer may not have obtained all the required permissions for the project. The investor must enquire whether the builder has free and clean ownership of the land on which the project is being built.
• The project must have an Intimation of Disapproval (IOD), which is a set of instructions that a developer must comply with so that he can legally construct the building. The IOD is valid for one year and needs to be reissued if the project has not been completed in a year’s time.
• Investor must check the credentials, track record and reputation of the builder. The chance of risk is less if the builder is prominent and well established.

However there are there are major benefits of buying a pre launched property:

• Investing in pre launched projects in cheap and the price advantage can go up to 20%.
• Investing in a pre launched residential property in prime locations is an intelligent choice. As the house comes with discount and promises high appreciation and return values.
• If you stay alert and study about the project before investing, pre launched projects offers you cheap and profitable proposal.

Pre launched projects are risky yet profitable bet. One should keep their senses open before investing; otherwise it’s advantageous and cost-effective.

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