What is an Off Plan Property in Dubai?
In very simple and self-explanatory terms – it is a property that you are buying off a building (or developers) plans. Which means you rely on concepts, computer-generated images, floorplans, model house / apartment to reach a decision to buy a property.
Buying Off Plan in Dubai gives purchases the benefit of securing a home at a fraction of the price while paying for the home over a few years in instalments. Some key benefits of buying Off Plan are:
- Owning a Brand-New Home
- Securing a Home with a low Deposit
- Making payments on a schedule according to your own income
- Forced savings
- Huge potential of making a profit at the end of the payment term
- Saving the headache of dealing with contractors and taking out the time to build your own home
- Potential to get good discounts and offers from developers on Off Plan purchases e.g., RoI from first month, Pre-launch discounts, etc.
What should you consider before buying an Off Plan Property in Dubai?
Buying an Off Plan Property in Dubai has its advantages but there also some things that you should consider before buying to make sure that you don’t end up losing your time and money.
To avoid such situations, you have to make sure you do a lot of research on the area and developers you are considering before you make a decision to buy. Some common things to consider are as follows:
- Be sure you are buying in an area or community you can see yourself living in once the project is complete (even if you are considering it only as an investment you will have to sell or rent it once its complete)
- Be sure you are buying from a developer with a solid track record and understand all the stake holders involved in the project from the architect to the contractor so you can see their previous work and get an idea of how your end product would look like – you can compare brochure pictures to end products to get an idea
- Try to avoid talking to too many people as everyone has their own side of the story, instead do your own research on the developer and the project because in the end this will be your property and someone who doesn’t like a developer’s design philosophy might have a negative viewpoint of them while someone who likes the design too much may not consider structural flaws.
- Make sure your can meet the financial requirements of paying the instalments and the final payment on time before even considering putting in a down payment.
- Keep in mind that there might be some delays in the project and plan accordingly, you don’t want to sell your house too soon and then find a rental home till your property is ready.
- Make sure you get your lawyer to go through the contract of sale so you know where you stand if you can not complete the payments on time or if the developer can not deliver the product on time and in extreme case the developers product delivered is not as promised.
- Make sure you are getting exactly what you are paying for. If the developer does not declare their fixtures, smart home systems, electronics, construction material used, etc. – you have every right to ask them about it. These can have a huge effect on the cost of construction and in the end the market price of the property once its ready.
- It is important to consider the financial standing of a developer before buying from them. If they have too many projects being sold in the market but have yet to deliver even one then this may be worth some research as they may be selling new projects to fund their older projects. Developers in this situation may cut corners to reduce costs.
What should you look for when buying an Off Plan Property in Dubai?
Just like when you are looking to buy a ready property you should check the amenities and facilities in the area prior to purchasing an Off Plan property in Dubai.
Some of the things you may want to consider are as follows:
- Nearby public transport, schools, parks, commercial areas, mosques, Hospitals and Clinics
- Uniqueness and Stand Out points of the building and community – this gives it a rise over the competition and thus increasing its overall demand
- Clean floor plans – avoid investing in a property with wasted space in the property or large pillars in the middle of a room that may make it difficult to use.
- Common area maintenance plans – understand the rules and regulations that the developers or the owner’s association will set for usage and up keep of the common areas.
- Community – this is one of the most important factors to consider. Don’t invest in a high-end building with a low-end surrounding or a low-end building in a high-end surrounding. The product has to match the community for it to be sustainable and stay in demand with the right target market.
- Research on the future supply of new properties in the area and plan accordingly. If there are too many properties coming up your prices for rent and sale will go down in case you will consider any.
- Some things to consider about the property itself
- Air conditioning and heating included system
- Water heaters and exhaust system
- Ceiling height
- Cupboards and their designs – if included in the room or concealed
- Long-term service charge costs e.g., if gym and swimming pools are in the building, they would cost more to maintain which the owners will have to pay for
- Master Bedroom should be a minimum of 3m x 3m (excluding wardrobes)
- Other Bedrooms should be a minimum of 3m x 2.5m (excluding wardrobes)
- Dining Rooms should be a minimum of 3.2m x 3.2m
- Living Room should be at least 3.5m x 4m unless it’s a smart apartment.
Final Tips on successfully buying Off Plan Property
Buy from a reputable developer and make sure you do extensive research on their previous projects before investing with them. Go through their brochure renders and end products to understand their commitment to delivering their promises.Choose your location wisely to make sure it goes along with your future plan regarding the use of the property. Make sure your property has a USP (Unique Selling Proposition) and a point of difference to give it a higher demand.Consider how many units would the developer need to sell before they can start their project to make sure there will be no delays in development work.
Make sure you understand what you are paying for and get a list from the developer of the materials and products to be used during construction and the fittings and equipment that will be supplied in the property. Also physically measure the sizes of the rooms with a measuring tape in an open space to get an idea of the rooms and spaces of the property (especially smaller houses and apartments). Make sure you get a good lawyer to go through the sale contract, so you understand your liabilities and responsibilities as well as the developers. A good lawyer will make you better understand the clauses and point out some items that you may mis or mis-interpret.
The Dubai Lands Department has been adapting fast to the changes in the market and is always working towards protecting all the stakeholders. The ESCROW system offers full protection and oversight from the Dubai Lands Department.
Always be aware of your rights and if any confusion you can always drop me a message for help.