There are many benefits of purchasing off plan properties, all of which guarantee a secure investment and capital growth.
As an investor, you would want to take advantage of buying flats at a lower price. The best thing about this endeavor is that you don’t have to wait for the project to be completed before putting it out for sale. You can get an immediate ROI from selling the property before settlement.
Looking into Dubai off plan property for sale offers superb advantages, but you must also be knowledgeable about the entire process before making any investment decision.
Here is a guide to buying off-plan properties, along with some helpful tips should you plan to resell it.
Top 4 Reasons to Buy Off Plan Properties
Off plan properties can be a lucrative investment. Here are four compelling reasons to buy one now.
1. Low purchase price
With an off plan property, you can purchase an apartment below its market value. The project may still be due for completion in a year or two, but this means that you have several months of capital growth. This is a huge perk if you want an investment that can turn around instantly. You may even enjoy additional discounts from the property developer if you invest early.
Buying off plan comes with the choice of letting a professional designer decorate the property or customizing it with your own design. You have the option to modify the blueprint to suit your needs, preferences, and budget.
3. Modern technology integration
Technology has made property investment easier than before. With digital marketing, you can easily understand how the property will be built. You can monitor the progress of the project and be updated regularly so you can be fully informed about the features of the finished product.
Furthermore, buying off plan means it can be fitted with the latest technology. These innovations are tech-savvy and eco-friendly – features that young professionals are looking for in Palm Jumeirah apartments for rent.
4. Structural warranty
Off plan properties are newly-built, so you should expect little to no costs once the key is handed to you. But in case something goes wrong, worry not because the developer will most likely give you a structural warranty that lasts for up to ten years.
For an investor like you, this will give you peace of mind knowing that you don’t have to spend a huge amount of money after settlement. But make sure to check the small print before signing the warranty because details can vary from one developer to another.
An off plan property investment comes with significant risks.
Changes in property market conditions
A significant downward move in the property market value can make your investment worth less than what you have paid. Though this risk applies to all types of properties, it will affect off plan projects more because selling it will become more complicated than marketing ready apartments.
Delays in completion time
Since you will be investing in an unfinished project, there is the risk of not being completed on time. But this risk can be eliminated if you work with a reputable property developer with an outstanding history of completing projects on or before the scheduled completion dates. It would be best to make sure that the sale agreement indicates that you will be compensated for any delays should the development won’t go as planned.
3 Important Considerations
To get the most out of your investment, there are important things to consider.
The property’s position is a crucial consideration if you want to guarantee the growth in your investment. Some areas in Dubai are more appealing to buyers than other places, so make sure to know where properties are being sold quickly and for a higher price.
2. Public transport
Most property buyers, especially working professionals, prefer living in areas that offer easier commute. So it would be best to get the best real estate deals in areas where public transport is very accessible.
3. Regional growth
Growth in the region means more transformational changes, creating new establishments and amenities. That means better connectivity and new businesses, which can increase the demand for rental properties.
When to Sell
Once you decide to buy off plan properties, you must have an exit strategy in place, considering that there are risks involved.
For instance, you can sell the property even before it is complete. But before doing so, you have to check the agreement you signed with the developer. You can’t put the property for sale unless the contract permits you to. Moreover, you have to consider the legal fees, selling commissions, and capital gains tax related to the transaction.
You can also choose to sell the property once it is complete for a higher profit. Ready properties are likewise easy to liquidate since there are people who need move-in ready apartments. Offering flexible payment options can make it easier and faster to sell or rent out.
Deciding when to sell off plan properties depends on personal circumstances. If circumstances have changed that you can’t afford mortgage repayments or perhaps you need a bigger place, you may need to resell the property immediately. But if you want to maximize capital growth during the development process, selling the property after its completion is your best option.
Investing in off plan properties is a profitable decision, whether you choose to sell it before or after it is complete. You just have to consider the best location for the property and which developer to get it from.
Check the developer’s track record, customer service, and credibility to ensure that you are dealing with a firm that will satisfy your needs and preferences. And before signing the contract, read it thoroughly, especially the small prints to guarantee that everything is accounted for.
Furthermore, it would be best to work with a real estate brokerage firm if you decide to sell or rent it out. They can provide you with helpful tips to make your property more attractive to buyers and tenants.
Generally, these professionals will hasten the selling process and get you the best price for your property. Enlisting the help of properly experts may entail an added cost but will surely help you gain more profits.
Mark Tolland is the Founder and Managing Director at Abode Property, a boutique real estate brokerage ﬁrm providing top-notch, personalized services to discerning landlords looking to sell or let out their premises in prime locations of Dubai like Marina, Downtown and The Palm. The firm also advises global HNIs looking to rent or buy a prized asset in Dubai, and prides itself in upholding high service standards, ethics and accurate advice.