If you are planning to invest in the real estate market in Dubai, you are probably wondering if financing an off-plan property is risky. This type of property is usually part of a large project that has not been constructed yet. While in some parts of the world, buying an apartment that does not exist yet physically may not be safe, the same thing cannot be said about Dubai.
Let’s look at the benefits and risks of investing in off-plan property in Dubai!
How does it work?
When an investor decides to buy a part of an off-plan real estate project, he usually provides a down payment that is between 10% and 20% of the property’s value and proceeds by signing a sales purchase agreement with the developer.
When purchasing off-plan projects in Dubai, you can be sure that you are investing in a feasible property and a potentially profitable estate further down the road. The number of such projects in the “city of future” is on the rise and Dubai real estate agencies attract foreign investors from every corner of the world.
Benefits of investing in off-plan property
One of the leading advantages of purchasing an off-plan apartment in Dubai is the affordable price. By paying for the property before construction on it even begins, you get to pay a much lower cost than you would for a fully-developed home.
Another benefit of investing in an off-plan estate is that you can sell the apartment for a reasonable profit while it is still under construction. If that specific home is located in luxurious areas like one of the Meraas off-plan projects, you can get a quick and sizeable return on your investment.
Last, but not least, the initial down payment allows you to invest in several off-plan projects at the same time. Instead of investing 100% of your funds in one property, you can finance up to 5 properties with 20% each. This strategy allows you to move freely on the real estate market and be open to investment opportunities.
Risks of purchasing an off-plan estate
There are no real risks to investing in off-plan property in Dubai, especially if you choose one of the Meraas off-plan projects, which promise a consistent profit in the long-term. The only factor that can diminish your winnings is a major delay in the completion time of the construction.