With so many developments taking place in almost every corner of the emirate, there are plenty of options for those seeking investment opportunities in the property market in Dubai. These opportunities are present in both the primary and the secondary markets.
Speaking particularly of the primary market, the trend of making off-plan investments has gained popularity in recent years. Investors, both new and seasoned, are preferring off-plan investments for the potential they have. If you, too, are planning to venture into this market, it’s important that you know about the pros and cons of the primary market before taking the plunge. And for this, we have got you covered.
In this article, we have shed light on the advantages (pros) and drawbacks/risks (cons) of buying an off-plan property. Take a look at them:
Pros
Abundant Options
As stated above, there are numerous options because of the increase in the number of developments in Dubai. Globally recognized real estate development firms have their projects underway in Dubai. Therefore, whether you intend to buy a waterfront property or an apartment in a skyscraper, you will have abundant choices at your disposal. From so many options, choose the one that suits your budget and deems suitable for your investment and venture into the market.
Comparatively Low Rates
One of the major reasons why there has been a shift in the property market in the favour of off-plan properties is that they come at comparatively low rates. For example, buying a property in Dubai Marina can certainly burn a hole in your pockets because of the high rates. Likewise, there are numerous other communities where property rates are touching the sky. However, off-plan properties are priced reasonably in such communities as well solely because they are still under development.
So, if you have a limited budget and are willing to wait for a while to generate returns, opt for off-plan property.
Convenient Payment Plans
Off-plan projects usually come with convenient payment plans. The buyer, generally, is required to pay a small amount initially to reserve the property. The remaining amount is to be paid in installments that extend beyond the handover time. This makes it easier since those who do not have a huge capital can buy such a property.
A Higher ROI
Another reason why there has been a noted increase in the transactions for off-plan properties is that they can generate a high ROI. Of course, you will have to wait for a little, but the wait is going to be worth it, provided you have invested in the right project.
In some cases, you may actually start getting offers for the unit you have purchased even before it is completed. If the offer is right and comes with substantial returns, there’s no harm in accepting it.
Cons
Delays
No investment is 100% secure, and the same goes for off-plan properties. The biggest drawback of investing in one is that you will have to wait for a considerable time before you can hope to earn ROI. Usually, it’s not until the project is completed. However, as stated above, there have been cases where buyers have received offers prior to the project completion. This, usually, happens when the project is a big-ticked one. For example, you can invest in Stella Maris Tower – the last waterfront development in Dubai Marina and hope to get quick returns. But, if the project is located at a little distance from the central city, it can take some more time before you could get offers.
Furthermore, quite often, projects get delayed due to numerous reasons. You must also take this factor into consideration before investing in an off-plan property.
Fluctuations
It’s no secret that the property market fluctuates from time to time. This fluctuation can impact the prospects of your investment. Therefore, it is important to time your investment perfectly, after thorough deliberation and consideration.
Research
Off-plan investment requires a lot of research. Take your time to know about the development firm, its recent projects and other vital details. Furthermore, do thorough research on the location and its prospects as well. Make sure the project has an escrow account to be 100% safe.
Final Thoughts
To sum it up, now that you’ve known the pros and cons that come with an off-plan investment, the ball is in your court. Take every factor into consideration and make an informed decision so that you can reap the maximum benefits of your investment.
