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  • Writer's pictureQualtors India

One of the Best Ways to Acquire an Asset




In current times, it is interesting to see offers from developers with a deferred payment structure for off plan (Under Construction) properties, for e.g. you may have come across marketing messages that say "Pay 20% Now & Balance on Possession". In this article, we will explore the benefits and pit falls for such opportunities and find out if these are good or bad for you as a as a consumer.


Before we delve into the nuances of such schemes, I would like to add a disclaimer: Opinions mentioned in this article are purely my own and are based on my 23 years of long stint with real estate in Gurgaon. Over these years, I have seen various cycles of real estate and have seen various builders go bust and rise both. The intent of this article is to educate the discerning buyers of real estate to make informed decisions.

So, lets get started. First off, the most important aspect of deferred payment schemes is to leverage time, so if you have money lying in your bank that can fund the entire property that you are intending to buy, then these schemes are not for you. But, however, if you are someone who has partial payment available now and are expecting that over the next 3 to 4 years you can arrange the balance money, then these schemes will work like magic for you.


Lets understand Offers like "Pay 20% Now and balance on Possession" more in detail. So, the builders offer such opportunities to lure customers to buy their product over the competition. In no way this may be considered as a deterrent to the quality of product offered. It is not necessary that a product offered in such schemes is inferior to the other products in the market. As for the Product evaluation, you should rely more on your own instincts & possibly rely on an experienced realtor for inputs.


What's interesting for you as a consumer is that you can book a property with 20% down payment and enjoy a payment holiday for 3 to 4 years before the next payment is due at the time of possession. Few advantages are:


  1. Low Entry Payment: With only 20% payment, you can own a property with a very low initial payment and still enjoy appreciation on the full property value. Consider this, lets say you acquired a 2000 sq.ft. apartment for 4 Cr. Under a scheme like this, you would have paid only 80 Lakhs as initial down payment, however, you will enjoy the appreciation on per sq.ft. basis or the entire 2000 sq.ft. apartment.

  2. No Burden of EMIs till Possession: Considering that you are putting in the initial 20% from your own funds, you don't need to leverage the mortgage until your next payment and possession happen.

  3. Leveraging Time: This in my opinion is very interesting. You end up leveraging time with minimal investment and enjoy the appreciation on the money deployed, so the ROI may be much better than if you had to own a ready to move property and pay the entire money upfront. On the other hand, if you do have surplus money lying with you, it can be deployed into other asset classes to make a better return.

  4. Risk Mitigation: Due to low initial exposure, you are also in a way mitigating your risk. As under such scheme, you are expected to pay the balance 80% only at the time of possession. The builder is also under pressure to deliver, considering that he will receive rest of the payment only at the time of possession.


In current times, it is quite interesting to own an asset by making use of these schemes offered by builders to beat their competition.

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