Is it sensible to buy resale flats?

Feb 01 2014, 15:50 IST
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The immediate possession can provide tax benefit from the first EMI itself. Reuters The immediate possession can provide tax benefit from the first EMI itself. Reuters
SummaryThe resale flats are an affordable solution to the accommodation needs of the salaried individuals.

Rahul was tired of shifting flats due to the ever increasing rental rates in Delhi until he decided to invest his money in purchasing a resale flat. In addition to a hefty discount, the flat came readymade with an instant-shift tag. Rahul can now spend the saved money on the interior décor and can flaunt his cheap yet elegant home to his colleagues.

Rather than waiting endlessly for the real estate prices to fall or falling in the sugar coated trap of the developers, a money conscious person looks for options that offer a good solution. The resale flats might be as good as new and can be obtained at a discount of no less than 10% of the price of a novel construction. However, does the cost saving alone make the resale flats an economical alternative to the new bed-sitters?

How Price Varies?

The prices vary depending upon a number of factors like city, locality, brand name of the construction company, age of the flat and many others.

City/ Locality/ New Flats (Per Sq. Ft.)/ Resale Flats (Per Sq. Ft.)/ Discount

Mumbai/ Kurla West/ Rs. 14500-17000/ Rs. 13500-16100/5-7%

Bangalore/ Sarjapur Road/ Rs. 5950/ Rs. 5300/ 11-13%

Noida/ Sec-77/ Sec-78/ Rs. 5000 /Rs. 4200-4500/ 10-16%

Gurgaon/Sec-85/ Rs. 5000/ Rs. 4100-4300/ 14-18%

Chennai/Porur/Rs. 5800/ Rs. 4600-4800/ 14-16%

Typical Issues with Resale Flats

The resale flats are an affordable solution to the accommodation needs of the salaried individuals. However, these come with certain unintentional repercussions as well.

Being dealt at the hands of individuals, purchasing a resale flat often requires paying at least 20% down payment that may be in cash, which is higher than that asked by the construction companies.

Resale might require dealing with some mandatory expenses like registration fees, stamp charges, transfer fees, utility transfer fees and real-estate agent fees among many others.

Sometimes, the previous owner may not have cleared the dues with the society or building management, which would need to be doled out by the new owners.

The other corollaries might include minor expenses allotted towards home makeover, parking/security charges, society membership fees and a couple of other overheads.

Direct Benefits

Getting your hands on a resale property is beneficial in several ways. Whether it is a newly constructed, ready-to-move-in flat, an older flat or an under construction one, every kind of resale apartments has its unique benefits:

In times when the snowballing property prices evade the reach of an income-conscious individual, the resale market

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