Potential of off-plan real estate investments in Dubai

Over the years, the UAE has transformed into the most sought-after destination for investors given its thriving economy, tax-free environment, business-friendly laws, and rapidly booming real estate sector.

Investors benefit from the potential capital appreciation and rental yields with real estate investment, especially off-plan investment in Dubai. And this is why more and more investors look forward to investing in Dubai real estate.

In this blog, we will help you understand what potential off-plan real estate investments hold for investors. But before we delve into that, let us first understand what off-plan real estate investments are and how they benefit.

Off-plan Investment

Off-plan investment is when you invest in a property that is in the developmental phase or under construction. You pay a pre-construction price and book the property. The off-plan investment brings along the following advantages for you:

Cost-effective: Any off-plan property for sale is priced lower than the completed projects. Thus you save money and based on the location you have chosen, the profit stands to be more substantial and higher.

Appreciation of capital: Throughout the completion of the project the value of the property is likely to increase, and after the construction is finished, the price of the property is expected to increase much higher than the original estimate. This translates to a lucrative return on the original investment.

Flexibility of payment: The payment plans are more flexible as compared to already completed properties. This is done mainly as the developers look to incentivize the investors by spreading the cost throughout the property’s construction. This way the investors can manage their finances much more easily.    

More choice and control: With off-plan property, you have more choice and control regarding the kind of property you choose. You get to choose from multiple properties across different locations. You can consider all the aspects and select the property that best suits your investment and personal needs.

Important Things to Consider

It is undeniable that investment in off-plan property has a great return on investment. Investors should be aware of the risks involved, such as construction delays market fluctuations etc. Here is a look at the key considerations:

Market research: Just like any other market the Dubai property market goes through growth and correction. To make the best investment make sure you thoroughly research details related to the property including the developer’s reputation, project location, and plans for the area in which the property is being developed. This will help you understand your investment much better.

Legalities: Dubai’s real estate market follows a strict legal code and though the laws are business-friendly, make sure that your purchase agreement is robust. It should have payment schedules, project completion and handing-over dates, along with handing-over procedures. If you are dealing with a reputable developer, he will provide you with an escrow account to safeguard your investment.   

Exit strategy: When youbuy off-plan property in Dubai, start with the end in mind. The off-plan real estate is a long-term investment and the value is unlocked after completion of construction. So, you’ll have to be patient. Upon completion, you can sell the property or rent it and maximize your returns.

Conclusion: Do keep in mind to conduct proper research and seek the services of relevant experts in the field. Dubai has much to offer. If you as an investor want to take advantage, the time is now.