A builder offers 12% a year on your money until possession. Why does that pattern worry people who have watched builders fail?

Return-promise schemes were how several collapsed builders raked in cheap money — when the builder folds, the payments and the flat go together

The rate is simply lower than a bank would pay

Such payments are taxed at a higher rate

'Only 3 units left, price rises Monday.' What is the honest way to check it?

Look at the RERA portal, where real inventory and price lists sit

Ask the sales team to confirm it in writing

Book one unit to hold it, then verify afterwards

Lesson 3 of 3 · 6 min

Builder red flags, and rent vs buy honestly

The pre-launch trap, the return-promise scheme, the one-sided penalty clause — and a rent-versus-buy comparison with nobody's thumb on the scale.

Spot the scam · WhatsApp

The pre-launch 'offer'

Sir, PRE-LAUNCH offer for select customers only. Book with ₹5 lakh token before RERA registration and get 20% below market rate. We also have assured returns scheme — 12% guaranteed returns till possession. Only 3 units left, price increases Monday.

Sort it

1 / 4

A clause in the builder-buyer agreement. Standard, or red flag?

You pay 18% interest on late instalments; the builder owes ₹5 per sq ft per month if possession is late

Rent vs buy, with no thumb on the scale

Neither column wins on arithmetic alone. An honest comparison prices the flexibility too.
What	Renting	Buying
Cash upfront	A deposit you largely get back	Down payment, plus stamp duty and registration that never come back
Monthly outgo	Rent	EMI, plus maintenance, property tax and repairs
If life changes	Move out with a month or two of notice	Selling takes months and costs a slice each time
What builds up	Whatever you set aside of the difference	Your owned portion of the home, as the loan gets repaid
Main risks	Rent increases; the landlord can end the tenancy	Floating rates push the EMI up; prices can stagnate for years; the EMI continues through job gaps

What the rent-or-buy question actually turns on

How long do you realistically expect to stay in this city?

Check yourself

1 / 3

Kabir asks

A large project offers a discount for booking with a token amount BEFORE its RERA registration. What are you really doing?

Done reading?

Saved in this browser — and finishes the course.