When it comes to investing in Dubai real estate, one of the first considerations is property prices and return on investment (ROI). Though the property prices in Dubai have not yet touched the 2014 peak but post-pandemic recovery has lured many potential investors to explore this market.
Buying off plan properties in Dubai
Investing in ready-to-move-in properties in Dubai is always a viable choice because it starts offering immediate returns in form of the rental amounts. Investing in off plan properties for sale in Dubai can make people a little sceptical because either these properties are un-constructed or under-construction.
If you are a newbie in Dubai, you must get your hands on a step-by-step guide to buy a property in Dubai. As the buying process for all properties in Dubai is almost the same such as, the buyer will have to pay a certain percentage (let’s suppose 10%, 20%, and 25%) as a down payment, sign a Sales Purchase Agreement (SPA) and after finalizing the deal, the buyer can start paying the remaining amount in form of monthly instalments.
Tips to consider before buying off plan properties in Dubai
Initially, buying off plan properties in Dubai may seem a difficult choice, and you must ask yourself why investing in Dubai off plan properties is your choice. Though you cannot see anything physical but it is somewhere easy on the pocket that can bring promising returns in future. Now, several developers have also associated the payment with the stages of construction, which means you can pay the amount only if you see there is progress in the construction of the development.
If you are still confused about buying off plan properties in Dubai, we have enlisted a few tips that can help you stay buoyant and help you make a well-informed investment decision.
Know the developer
The real estate investment decision depends upon several factors such as the developer’s track record, development status and project delivery date to name a few. The UAE government has imposed strict buyers’ protection laws in the real estate sector but still, it is crucial to have thorough knowledge about the developer, before buying off plan properties in Dubai.
Talk to your friends and family members about the developer and take their opinion. For more authentic information, contact a few property agents in Dubai to discuss certain projects and developers and they can guide you on, whether the developer is reliable enough or not. Moreover, you can also check his track record of what the developer has already delivered in the market and what the construction quality is.
Gauge off plan property prices
First thing first, you must understand that buying off plan properties in Dubai does not mean that you are buying a cheap option. It just means you are getting a good deal, because the property is still in the development phase. Another factor that a majority of first time buyers ignore is the hidden or associated costs attached to the property purchasing process.
For instance, the buyers only focus on the asking price, down payment and the instalment plan and seal the deal. First of all, do not just focus on the total price of the property but compare the per square foot price of different off plan properties before buying in a certain development. It will help you better analyse whether the property that you intend to buy is a viable option or not.
Location remains the most important factor
Yes! Even if you are buying an off plan property it does not mean you can overlook this important point. Location is still the most important factor when it comes to buying a property because it will impact the demand for property in future, your lifestyle (if you plan to live there), and the returns on investment as well.
Do not just rely on what an advertisement material shows, go and check yourself before committing to buy properties in Dubai. It will help you understand the surroundings, the distance from the key destinations, and whether the project is located in an established area or not. Buying a cheap property in an unestablished area can be costly for you in future because it will take a long to earn the returns. Even if you plan to live there, you will have to spend a lot on travelling for school, office, shopping, or any other recreational trip. Therefore, think a lot before buying an off plan property.
Check project legitimacy
Before investing in any off plan project in Dubai, you must be sure about the legitimacy of the project. Though there are strict rules and only registered projects can be advertised in the UAE yet it is better to verify the projects by visiting the RERA website. Moreover, never make payments other than the escrow account of the development.
By taking these smaller steps, your payment remains safe, even if the project gets shelved.
Always work with RERA registered real estate agent
You must work with an agent, when it comes to investing your hard-earned money in Dubai real estate sector. It is because if you go directly to the developer, you will only get to know about his projects while an agent can help you look through all the available opportunities that you might miss otherwise. A question that you must ponder is how to choose the right real estate agency in Dubai?
In order to make the best investment decision especially when it comes to investing in off plan properties, you must work with the top-performing, RERA-registered property brokers in Dubai. Only a professional real estate agent can help you find a lucrative investment deal, within your budget. He can also assess the project better than you, anticipate market conditions and help you understand future investment trends. Moreover, it is the agent who knows the market better than you, so it is better to find a professional and establish a good rapport with him.
Understand the payment plan
The higher the post-hand-over payment is, the safer your investment is in off plan properties in Dubai. Moreover, you must avoid payment plans that are based on dates but go for construction-condition-based payment plans. It will help you see the progress of the project and make payment accordingly. However, before committing to such payment plans, you must be sure about your income and savings, otherwise, paying a hefty amount by the end of the project can be problematic.
Read the SPA carefully
The Sales and Purchase Agreement (SPA) is a document that you must thoroughly read to understand the payment plan and what you are supposed to pay before you can sell the property.
For instance, a few developers mention that you can sell the property only after paying 30% of the total value of the off-plan property during the under-construction phase, and after the construction, you will have to pay 50% of the total value before being able to sell it ahead. It is the SPA where the developer enumerates all terms and conditions, so before signing this document, you must read it thoroughly and carefully.
Buying off plan properties in Dubai can prove to be a viable investment decision in the long run. However, do your due diligence and consider all the above-mentioned pointers before committing to this investment plan.
The sales experts at HFRE are just a call or email away and are always ready to help you make a well-informed investment decision in the Dubai realty market. All you need is to call us at +971 4876 2473 or discuss your plan with us at firstname.lastname@example.org. One of our representatives will get back to you within 24 hours with promising off plan property options, so you can make a well-informed investment decision.