The investors of buy to flip felt out of finances due to property crash of 2008 which took the buying off plan into the dark side. However, it is right to say that off-plan buying is taking its step forward in 2019.
There are various off plan payment plans as the result of developers, and there are restrictions in order to avoid the earlier crash so that investors do not increase the price for the customers.
The following useful tips will help the investor in making the off plan purchase:
Less cash needed
Though you need a good lump sum saving to be used as a deposit, the amazing thing is that sometimes it does not equal to the 50% property value. Sometimes, you just have to deposit an initial payment of 20%. Property developers have the idea that people come up with their suitable payment plan as they do not have always 50% saving as a deposit. The plans such as 30:70 where you first pay 30% and rest on the property completion and in many payment plans you just have to pay 10% payments with the completion of each phase of property.
You can better arrange your payments with off-plan buying as you are not under the loan stress of whole property value. Yes, no doubt, there are huge benefits associated with the ready property such as the down property prices along with off plan rule of mortgages; there is a tremendous increase in the sale of the ready property. However, it is not wrong to say that off-plan are still cheaper (30% less than the market value) and with the help of investor focus on off-plan property the gap will get more big in future.
We know that repute of a developer matters a lot in UAE, such as all the off-plans are not lent fully by the banks. It all depends on the developers and their repute in the market. The big developers like Azizi, Akoya and Emaar have mortgage lending from banks for their off-plan projects. Moreover, with reputed developers, your money is also safe.
Property for sale can only be advertised by the authentic developer
It is a known fact that because of the new rule in 2016, the brokers and developers need approval before the property is advertised from Dubai real estate regulatory authority. The rule is protecting the authentic developers and buyer from the false property advertisement.
There are lots of drawbacks associated with the off plan properties but they are quite popular among the fresh investors and first home buyers as they can save a huge amount till the settlement. However, investors have to go through the normal difficulties and risks associated with off- plan projects.
The only negative aspect with off-plan property is the hesitation that whether buyer got the good deal or no. The following tips are helpful:
It is very important to do the background check for the developer. If possible check the insights of previous past projects and developer liquidity in such projects. You can also check the reviews of old clients and can inspect the property quality. You can do this on your own or can outsource it.
Property agent should be wise
Your property depends on your agent’s smartness. He can win or lose the client. Make sure your agent is wise, open, and genuine and doesn’t hide anything from you.
No rental guarantees
Developers usually attract buyers by promising them a rental guarantee for the first few years after the completion of the project. After that time is finished, many owners came to know about the low price of rent which developer took the advantage off.
All the property investment comes up with financial risk even the off plan projects. We know that the property price falls between the period of purchase and completion. It is safe to get a partner with the company that can assure you saving money in either part of the transaction.
Get legal advice
If you are a first home buyer then getting a legal advice is very important. It is safe to look at all the documents and contracts before you sign anything. The contract should have a completion date of property with “drop dead” or “fund set” outline clause. The contract should also have clause related to ‘commencement’ and ‘acquisition’.