An off-plan property is an unconstructed property purchased directly from a developer or in some cases a first owner. Now, buying property that has not been built yet may seem like a risky affair but it doesn’t have to be if you do your homework. Start with weighing the pros and cons.
Advantages of off-plan property
Disadvantages of off-plan property
- Considerable savings
Off-plan property is the earliest time to buy a property, and hence the cheapest. It also gives the buyer more choice on the available apartments, allowing them to maximize their return on their investments.
- Selling before completion
Investors can often sell their off-plan property prior to project completion. As long as the project is proceeding as planned and the market is stable, you can expect a hefty profit from this.
- Up-front costs are lower
While payment plans for off-plan property vary from developer to developer, the down payment is generally lower compared to the down payment for property that has already been built.
- Uncertain completion time
Often, projects run beyond their completion dates, sometimes by weeks and sometimes even longer. Always plan for such possibilities (such as the lease on your current apartment if you are planning on living in the new property) and don’t be caught off guard. It is also for this reason that researching the project developer’s track record is extremely important.
- Changing market conditions
A downward move in property prices can result in the property being worth less than what the buyer has paid. This risk is not limited to off-plan properties, but can impact them more as they may be harder to liquidate than ready properties.
Then, it’s time to learn more about the off-plan property you are interested in, as well as the process to acquire it. To start things off, the developer will need your passport copy, Emirates ID and reservation form containing the terms and conditions of the deal.
There will also be a reservation or booking fee amounting to 5 to 15% of the total amount which will be paid to draw up the Sales and Purchase Agreement (SPA) which will be signed by both parties.
After this, start your homework on the property. Is it close to amenities such as groceries, schools and hospitals? What about your workplace? How reliable is the developer?
It’s also important to keep in mind the additional acquisition fees. Aside from the actual price, buying off-property for sale in Dubai also comes with other charges in line with your property purchase, such as legal fees, developer fees and agent fees.
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