Dubai has emerged as one of the most sought-after international investment locations in terms of real estate. The city has had a futuristic architecture, tax-free income opportunities, and an economy that keeps growing by leaps and bounds to offer unmatched opportunities to investors around the world. Out of all the available property types, purchasing off plan property in Dubai is currently enjoying high demand because of its low cost, flexibility and high returns. 

When you decide to venture into the Dubai real estate market, it is important to have the dynamics of the off-plan properties. This blog explains what off-plan property is and why it is a good investment, the legalities of it, and the way you can maximize your investment. 

What is the Off-Plan Property in Dubai? 

An off-plan property is a property that is either in the bridge or planning stage or is a construction that is being sold by developers or registered brokers. These properties are purchased by investors before being finished which is usually at a significantly lower price than the ready to move-in units. 

To take an instance, when the luxury apartment in the high-end area costs AED 2 million after completion, the same apartment could be offered at AED 1.5 million when it is in off-plan. This is a low price factor that attracts international customers to off-plan investments mostly.

Why to choose the Off-Plan Property in Dubai? 

1. Lower Entry Price  

The off-plan properties are normally underpriced. This will allow the investors to buy the premium units at reduced rates, increasing the capital value as much as possible in the future when the project will be completed. 

2. Flexible Payment Plans  

The developers in Dubai usually offer nice plans of payment in installments. Buyers are relieved of the burden of making large payments at once and can make them over a number of months or years. 

3. High ROI Potential  

The real estate market of Dubai has a history of a fast-growing market. Investing in an off-plan property at the beginning of a project, you may not realize that the cost of the property would go up tremendously before the project is completed. 

4. Wide Range of Choices  

Dubai developers provide a variety of off-plan projects that are offered at various prices and lifestyles that match different budgets including luxury beachfront apartments and smart apartments in the urban hubs. 

5. Developer Incentives  

To entice the customers, numerous developers offer incentives in the form of waived registration fees, free service charges in an average period or even assured rental incomes. 

Legal regulations to purchase off plan property

Dubai has put up well-formed regulation frameworks to secure off-plan investors. 

1. Registration under RERA (Real Estate Regulatory Agency): The RERA should be involved in all the off-plan property sales and should be registered under this agency to bring in transparency.
2. Escrow Accounts: The payments are placed in an escrow account which is operated by Dubai Land Department (DLD). Most of the funds are paid out to the developers when construction milestones are met.
3. Title Deed Assurance: The investors are awarded with an official title deed at the time of property completion and handover. 

Such regulatory framework tailors the protection of buyers against risks that may arise such as the delays or cancellations of projects. 

Buying Off-Plan Property in Dubai Steps

Whether you want to know how to purchase property in Dubai without residency, then you are in luck as Dubai does not enforce residency requirements on foreigners wanting to purchase off-plan and ready property. Here’s the process: 

1. Research Developers and Projects  

Find out established developers with previous record of delivering projects on time. Emaar, Damac, and Sobha are some of the major players in the off-plan market in Dubai. 

2. Choose the Right Location  

The location is critical when it comes to ROI. Dubai has always been popular in areas such as Downtown Dubai, Dubai Marina, Business bay and Mohammed Bin Rashid City in off-plan residential property. 

3. Understand the Payment Plan  

Read thoroughly the payment plan of the developer prior to them signing. Majority of the plans would involve a down payment of 10-20 percent to be paid with the remaining amount to be paid in the construction period. 

4. Sign the Sales and Purchase Agreement (SPA)  

This contract explains the real estate, schedule and payment requirements. Be sure that all terms are clear when committing. 

5. Register with DLD  

The purchase has to be registered by the Dubai Land Department to render the purchase legal. 

6. Monitor Construction Progress  

The progress on a project is regularly reported to developers. The portal is also able to guide investors on developments made by RERA. 

The risks of the Off-Plan Property Investment

Although off-plan properties are very rewarding, investors must not overlook the risks that are likely to arise: 

1. Delay in a Project: Construction Other projects can be delayed, pushing the hand-over back.
2. Market Fluctuations: Since markets are subject to change, the prices of property may change.
3. Developer Reliability: Not every developer is equally reputed to be good and on time. 

In order to avoid risks, it is always better to select government approved projects, explore previous projects of the developer, and use the services of the reliable real estate consultants such as Invesca Real Estate. 

Ready vs Off-Plan Properties Which is superior? 

1. Off-Plan Properties: Less expensive, easy payments, and good ROI potential though they have some risks such as delays.
2. Ready Properties: Immediate possession, opportunity to rent, no risk of construction but need more investment in the initial stages. 

Off-plan properties are tend to be the better option to long-term investors who are interested in capital appreciation. 

Guidelines to Successful Off-Plan Investment. 

1. Use a Reliable Real Estate Company - An investment firm such as Invesca Real Estate assists with the identification of the best Real Estate projects and negotiates the best deals.
2. Check the developer credentials- The developer should always verify the past projects and RERA registration.
3. Target the best Places - It is possible to have high returns on properties in the center or developing hubs.
4. Know Your Exit Strategy- Determine whether you are going to sell prior to completion or rent after handover. 

Keep abreast of the market dynamics in Dubai property market is a dynamic one. Tracking regulations and trends is the most important in maximization of profits. 

Conclusion 

Dubai has been able to keep drawing international investors due to its vibrant real estate prospects.  The opportunity to purchase an off-plan real estate in Dubai stands as an opportunity to enter the market at reasonable prices, take advantage of a flexible payment schedule, and have a high profit. 

You may be an international buyer researching off plan property investment in Dubai or you may be a resident with a specific need to buy your first home, Invesca Real Estate will help you go through the process. Since choosing the correct project to dealing with the legal formalities, our team would see to it that the investment process is smooth and lucrative.