In the UAE, the real estate market offers an extensive range of options for investors. Off-plan property investment has traditionally been popular in the UAE, especially in Dubai.
Off-Plan property is an unconstructed property bought directly from a developer or in some cases a first owner. When buying property as an investment, it’s important to look for two key attributes – high returns and capital growth. Off-plan property investment has slightly different buying processes when compared to pre-built buy to let property and has its advantages and risks.
Advantages of buying off-plan property
- Flexible Payment Plans – Developers are progressively formulating exclusive payment plans to attract their clients.
- Sell Your Property Any Time – Dubai market is a stable and secure market to invest in off-plan properties.
- Better ROI – Once the settlement threshold has been met it can be sold at a profit before completion, eventually new owner will take over all the remaining payments.
- Secure – Real estate investment in the fastest-growing Emirates and due to the lower purchasing rates is extremely promising in terms of return on investment (ROI).
Risks in buying off-plan property
- Projects Can Get Delayed – The most common issue with buying off-plan is that your project may be completed after their timelines mentioned. We recommend go with a reliable developer and investigate the developer’s track record for any such delays.
- No Control and Profit – You don’t have control over the property and can’t get any earnings till the property is built and received by you.
- Change in Market Circumstances – Market risk, however, occurs in all markets across the globe and when buying off-plan property you risk a general decline in real estate values between after you are relinquishing your booking fee and receive the keys. Therefore, always be sure to maintain enough cash flows to withstand these market changes and invest based on the quality of the property as divergent to short term market speculation.
Being aware of and managing the risks associated with real estate should be an essential part of your investment plan.
If you are still confused, then take your time to research the market trends to gain the foresight you’ll need for the benefit from off-plan purchases.
