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In a rapidly fluctuating real estate market like the UAE, investors are becoming more cautious about shelling out money to buy property. Furthermore, the question whether to buy a ready property versus an off-plan unit is a dilemma that perpetually confronts both investors and end-users alike.
Ready investments in the booming real estate sector offer solid returns to people who have cash in hand. Off-plan projects serve as a safe investment for people who want to yield good returns without spending too much money to begin with.
The main advantage of off-plan properties over ready-to-sell units is that the investor pays lower than the market price when ready. Most banks offer flexible repayment plans. Off-plan properties generally require only 10% down payment and are known to really appreciate upon completion. The investor also gets the prime pick in selecting the type of property. Since he is involved in the building stage, he can sometimes customise the property according to his taste and often gets to choose the décor, fittings and design.
A ready property, on the other hand, offers the security of seeing the brick-and-mortar structure before spending money on it. It is mostly preferred by people who want to move into their own house. It also serves as an investment return as one can rent it out quickly rather than having to wait for the project to be completed.
An off-plan property should be transacted through an escrow account. Its main risk is its uncertainty factor. Due to the long duration between inception and completion, the project maybe cancelled or delayed, resulting in loss of investment. Since the property is merely a structure, you have to ensure that the size and specifications mentioned are met by the developer. The exact location, dimension, quality, amenities promised and other elements should also be ensured by regular follow-ups with the developer.
Ready properties do not face these risks. However, they may cost more than off-plan properties.
Therefore, off-plan properties are a good investment opportunity for salaried employees, while ready properties are ideal for businessmen and big investors.
• Ready properties provide quicker investment returns to purchasers
• Off-plan properties generally offer good investments at much lower prices
• Projects under construction bear the big risk of uncertainty of completion
Get to know how to attract buyers through open houses
Source: Zenifer Khaleel, Special to Properties
The writer is a freelancer