Dubai is currently in the hot list of the booming real estate market. Investors are trying to find the best investments, such as villas, commercial buildings, or flat for sale in Dubai. While most people are trying to get the best locations and areas connected to main roads, developers will also try to sell off-plan properties, which are usually still under development. Depending on what kind of investment you need, you might want to take a look at the possibilities for Off-Plan properties.
What Is an Off-Plan Property?
Simply put, an Off-Plan property is a property which is still under construction, but is already considered available for purchase. Most of these off-plan buildings are made to make residential flats. The investor or the buyer typically make a 10-20% deposit to secure his or her ownership of the building. Here are some of the pros and cons of owning one.
- Off-plan flats are cheaper
The final price for off-plan properties is usually cheaper and has a lower upfront cost. Because of this, the investor can secure a property without getting more capital. This works better if residential flats in the area are high in demand.
- Buying is simpler and faster
Typically, the item for purchase is still under construction. This means that there are fewer things to sort out for the contract. In fact, once the seller or developer and the buyer completed the property check and had an agreement, the property can be considered sold.
- No renovations needed
Unlike second-hand properties, off-plan buildings are brand new and don’t need renovations and additional fixtures. If you want a specific feature, the developer does it for you. For example, you want more studio-type units than one-bedroom units; you can contact the developer so they can create a new plan for your property.
- There is a property insurance
Since you’re buying a new property, this comes with new insurance policies like a 10-year warranty for construction defects. Unlike second-hand properties, you’re dealing with a property with longer useful life and insurance from the developer.
- You’ll have to wait for the completion of construction
Because the property is unfinished, the owner will have to wait for the completion before he or she can reap out profits. Although you can rent out rooms that are already completed, the customer experience will not be a good one because of unavoidable construction noises and nuisances.
- No guarantee for market conditions
There is no guarantee that you will still enjoy a profitable investment once the building is finished. This is because there is no guarantee that the building will be completed on the intended date. The worst thing that can happen is that you will have to sell the property at a lower price.
- Getting a mortgage is more difficult
Since there is no guarantee for the completion date, getting a mortgage is also difficult. Banks and other financial institutions will be hesitant in loaning out an investor if there is no guaranteed return or if there’s a greater possibility of a loss.