If you have been contemplating the idea of investing in the ever-growing Dubai real estate, but don’t want to risk all your life savings, opting for an off-plan property may prove to be a viable idea. It is a type of property which is yet to be completed. The developer advertises the floorplan and other vital details related to the property including facilities and amenities to attract buyers and investors alike.
Having said that, off-plan properties do not come without their fair share of risks and rewards. In this post, we have shed light on both aspects. Read on to know more about them:
ROI with Minimum Capital Investment
The biggest factor that goes in favour of buying an off-plan property in Dubai is that it is priced comparatively low as compared to ready-to-move-in properties. This makes it easy for investors who have budget constraints to take the plunge and enter the real estate market.
From an ROI point of view, too, off-plan properties in Dubai tend to perform better. If the project you have selected is located in a prime location and has better prospects, in terms of growth, there are huge chances that you will be able to sell it before it is even completed, that too at higher rates.
A Convenient Way to Diversity Portfolio
As off-plan properties do not cost much in comparison to ready properties, investing in one allows investors to diversify their portfolio. For instance, if an investor has already invested in commercial properties and ready apartments, they can also buy an off-plan unit part of up and coming mega projects to enhance their listing. This will also increase the chances of ROI generation.
Attractive Rental Yields
With Dubai welcoming a huge number of expats every year, there’s always going to be demand for residential properties for rent since not everyone can afford to buy a home. So, if you don’t want to sell the unit right away once it is ready, you can pursue the option to rent it out later. Newer residential projects offer attractive rental yields. Thus, it can prove to be a wise idea to become a landlord and enjoy a passive stream of income. However, for it to happen, the project must be situated in a prime location and boast of state of the art facilities.
Feasible Payment Plans
Most off-plan projects come with feasible payment plans. The total amount is to be paid in instalments. The number of instalments and amount to be paid per instalment varies from project to project and developer to developer. However, most of them show flexibility for negotiation when it comes to offering leniency in payment plans.
This type of investment is governed by certain real estate rules and regulations in Dubai. The main aim is to protect the interest of buyers and investors.
It is not uncommon for off-plan projects in Dubai to experience delays. The construction work often gets halted due to any particular reason, which, in turn, delays the completion.
Ideally, you should be prepared to face such a situation. However, some investors cannot afford such delays as their life savings are at a stake. Furthermore, in case they have borrowed money from someone, for investment purposes, they may be facing pressure from the other party.
To avoid landing in such a situation, always make a point to invest in off-plan projects launched by top developers.
Although the risk of fraud is minimum, there’s still a possibility of investors, particularly the ones who have just entered the market, to become a victim of a scam or fraud. The best way to avoid this from happening is to check the credibility and validity of the seller and developer. Make sure both the project and the developer are registered with RERA. Verify their details on the RERA portal.
Changed Market Condition
There’s an element of uncertainty hovering over making the decision of purchasing an off-plan property. This is due to the fact that changed market conditions can have an adverse impact on the property value as well. This usually doesn’t happen as prices tend to remain steady or more upwards. However, in certain cases, such as a global pandemic or an economic restlessness, the prices may fall.
No Immediate Return
Off-plan properties do not yield immediate returns. Mostly, investors receive higher rates for units when they are ready to be occupied. However, in the case the project has gained prominence in the market, offers may start pouring in sooner.
Difference in Quality
A very rare occurrence, but certainly a risk. In some cases, the project may not turn out to be as you had expected. There can be a difference in quality that could hamper its prospects. This issue, again, can be negated by relying on a renowned developer.
A Final Word
To sum it up, the rewards clearly overweigh the risks. So, finalise the deal for an off-plan property for sale that is developed by a popular developer to earn a high ROI. Contact Zoom Property for the best listings for off-plan properties in Dubai.