Buying off-plan property means purchasing property – typically an apartment – in advance of its completion. Off-plan property is typically sold prior to construction beginning at a significant discount, often with a small deposit requirement.
What are the Advantages of Buying Off-Plan Property?
Buying off-plan lets you purchase property at a price that could be below its future market value and the principle has become a commonplace method of sale across the country; although Dubai, due to the potential returns on capital, and a strong rental market, is where most off-plan purchases take place.
Buying off-plan is ideal if you want to resell the property once it’s finished. In order to purchase off-plan property, you usually need to provide a deposit of just 10-20% of the property’s value, making securing the property simple and affordable.
Whether you plan to resell or live in the apartment, one of the biggest advantages of buying off-plan is selection. Unlike in completed buildings, you can usually select the ideal unit to suit your needs, tastes and budget when buying off-plan property.
In a rising market, some developers will permit the contracts to be sold on, which means purchasers can take a profit on the unit before it is built by selling the contract to another party.
What are the Disadvantages of Buying Off-Plan Property?
Buying off-plan property is far from risky, but the majority of developers are now offering a deposit guarantee for extra security and peace of mind. However, it’s obviously not as certain as buying a new and completed or pre-owned property which you can ‘touch and feel’.
There’s also the possibility that the property you purchase doesn’t increase in value as much as you expected, or at all, during its construction. To ensure optimum ROI, it’s best to look for off-plan properties that have been built by reputable developers, within areas with growing levels of investor demand. Developments near transport facilities always tend to do well and areas undergoing regeneration are sure to see an increase in capital value.