UAE property sector gains pace ahead of Expo 2020 in Dubai
Eight useful tips an investor should take into account when purchasing an off plan property in the UAE, as it is one of the preferred options due to its low price compared to ready-to-use properties
The UAE property sector gains momentum ahead of Expo 2020 in Dubai in October despite the challenges of COVID-19 pandemic.
Ahmed Aldoulah, a renowned real estate consultant, identified eight tips that a real estate investor should take into account when purchasing an off plan property in the UAE, as it is one of the preferred options due to its low price compared to ready-to-use properties, and the facilities provided to buyers.
“The off plan buying process is a good option for many buyers, who usually look for an investment with fruiful return. That is why many of them buy properties under construction or that are still on the plan,” said Aldoulah,”on Plan” CEO.
In the UAE market, these are the eight tips that a real estate investor should take into account when buying a property off plan or under construction:
Consulting before buying: It is advisable for those wishing to acquire an off plan property to ask for advice from a real estate consultancy licensed by the regulators. Here he will get complete data about the specifications of the property that have been agreed upon The developer’s reputation: The off plan property buyer should search for the real estate developer with a good reputation. In Dubai, it is very easy to know everything about any real estate developer. Investors have many channels and multiple tools through which they can verify the developer’s reputation as well as their history of construction, delivery and prices.
The quality of the real estate developer and his history help in clarifying everything such as his commitment to completing projects on time, as well as having an “Escrow Account”. The Dubai Land Department keep a special register called “Real Estate Developers Registry”, with the names of the licensed real estate developers. Developers are not allowed to practice unless they are registered and licensed by DLD so as to comply with conditions.
Return on investment: Return on investment ROI, is one of the most important considerations that an investor must keep in mind when buying a property off plan. Return on investment varies according to market conditions. With ROI ratio of 7 to 9%, the emirate of Dubai is one of the cities with the highest return on real estate investment in the world.
The project site: It is important to buy a property in a privileged location, with all the services that the residents need, including schools, hospitals, and shopping centers. It is preferred to be close to a suitable road network that connects well with the rest of the city. The floor in which the intended unit is located and the view it provides, must also be taken into consideration.
Quality of the property: The quality of the property is of great importance when buying off plan. This includes the quality of the compound or the location in which the property is built and the availability of important services. Atention must be paid to the finishing and the materials used in construction. Quality may not comply with what we see or hear from sales agents, brochures or images. Such hints can be avoided by visiting other projects done by the same developer.
Completion rate: The ability of the real estate developer to deliver the property, according to the timelines set before starting construction works, is an important determinant when choosing the real estate developer to buy a residential unit. The shorter the time period between the promised date and hand out date, the greater the developer’s reliability, which is taken in consideration when buying off plan property.
Payment plans: The buyer must specify the price of the property agreed upon, and the payment plan, as real estate developers offer many payment plans that sometimes extend to 10 years. It should be noted that real estate developers add the interests to the selling price, and thus the longer the payment plan, the higher the cost borne by the buyer will be. This means that it is necessary to mention the expected completion date of the project in the off plan real estate purchase agreement, and the compensation incurred by the developer in case of any delay.
Ater-sales service: Ater-sales service is an essential part of real estate assets management, and it boosts customer confidence when they are freed from procedures and routine, such as clearing property documents ater purchasing, or ownership changing and so on.
Aldoulah, who provides free real estate consultations to clients, pointed out that there are 5 main aspects that encourage real estate investors to buy a property off plan, most notably its low price and flexible payment plans compared to ready-to-use properties. The value of a property increases upon project completion, which helps in good sale returns.