Investing in real estate is one of the quickest and most reliable ways to build profits over time. But the most important question that is often overlooked is: should you invest in off-plan projects in Dubai or ready to move properties?
Both options offer unique benefits but they also come up with some cons. Off-plan properties do offer low prices and strong return on investments but ready to move properties provide immediate rental income and stability.
In this blog, we will have a complete look at both of the options, their pros and cons along with their return potential so you can have a better idea on which one to choose from.
What is Off-Plan Property?
Off-plan property is often purchased before it is even built or completed. Investors usually buy off-plan projects in the UAE based on the developers’ plans, brochures, floor plans, and 3D layouts.
However, it is important to note that off-plan properties tend to be less expensive than a fully furnished unit. These properties are a part of residential or commercial projects allowing the investors to pay in phases, as per the payment plan set by the developers.
Pros of Buying Off-Plan Property in Dubai
Buying off-plan property in Dubai can be a smart approach with the growing real estate market and strong investor predictions. Here are some of the merits of buying off plan projects in the UAE.
- Lower Prices & Early-Bird Discounts
Off-plan property is still in the construction phase therefore it is available at lower prices than the ready to move apartments.
Developers usually offer pre-launch prices or early-bird discounts in order to attract more buyers and investors and create a hype about the project.
This allows the buyers to buy the property at a discounted price, hence getting a strong return on investment in the later future.
- Flexible Payment Plans
Dubai developers are known for providing flexible and interest free payment plans to their clients.
The best thing about buying off-plan property is that you do not have to pay all the amount at once, rather you can easily pay the amount in smaller chunks during the construction phase and even after the construction is completed.
Common payment structures include 50/50 or 60/40 where a portion of the amount is paid during the construction phase and the remaining amount is paid after completion of the project.
- High Capital Appreciation
Since off-plan properties are usually bought when they are in their construction phase, buyers tend to earn a good profit over it when it is completed.
It is so because when infrastructure, retail outlets, and transportation links are completed, property values in that respective area spike very high, giving the buyers a good return on investment.
- Customization Options
When you buy off-plan property, you can customize the aspects of the unit yourself such as kitchen, flooring, color schemes etc. Some developers also offer the choice of layouts within the project.
This can add value to your property and make it more appealing and different when it comes to renting or reselling.
Cons of Buying Off-Plan Property in Dubai
While off-plan properties offer benefits, they tend to have some demerits as well that buyers and investors should definitely consider. Understanding the cons of buying off-plan properties in Dubai can help you make strategic decisions in the future.
- Project Delays or Cancellations
When it comes to off-plan properties, one of the most risky things is that the project might get delayed or cancelled due to some reasons. Despite the regulatory oversight by RERA, some projects still undergo delays due to:
- Labor Shortages
- Market Conditions
- Developer Cash Flow Issues
Sometimes, it happens that if a developer is unable to complete the project, it might get cancelled, causing your funds to tie up. Though Dubai’s regulatory bodies offer some protection through Escrow laws but this still might impact your financial planning.
- No Immediate Rental Income
Unlike ready-to-move properties, off-plan projects in the UAE do not offer immediate rental income because they are still in the construction phase. This means that you have to wait for a longer period of time before the rent starts coming in.
- Quality and Finishing may vary.
When buying off-plan properties, you rely on brochures, plans, and promises. Therefore, the final product may not always meet your expectations in terms of quality, layout, or views.
Though reputable buyers deliver what they promise, but you need to be cautious of certain things like:
- Review the developer’s past projects
- Visit the model units
- Include clear terms in sales agreement
- Market Fluctuations & Price Risks
When you buy off-plan projects in Dubai, you are actually betting on the future market conditions. If property prices fall by the time your unit is completed, you might not even get what you paid.
However, it is important to note that though Dubai’s real estate is market is currently booming and is under stable conditions, yet there are certain things you need to consider such as:
- Global Economic Trends
- Local Supply and Demand Shifts
- Policy Changes
What are Ready-to-Move Properties?
Ready to move properties are the real estate units that are completed and are ready for immediate possession. This means that the buyer can either immediately move in or rent the unit without any further approval.
In Dubai, the ready to move properties can be the residential or commercial units that have received a completion certificate from the authorities, ensuring that the unit meets all the industry standards.
Pros of Buying Ready-to-Move Properties in Dubai
Buying a ready-to-move property in Dubai is a great option not only for the end-user but for investors as well. Here are some of the benefits of buying ready-to-move properties.
- Immediate Possession & Use
Ready-to-move properties are completed and are available for immediate possession and use. You might get in or rent it out as soon as you complete your payment and get your mortgage approved.
Ready-to-move properties are suitable for:
- End Users who urgently need a home
- Investors looking to earn rental income
- Lower Risks & No Construction Delays
With ready-to-move properties in Dubai, you don’t have to worry about the risks, construction delays, cancellations, or design changes.
It is so because the buildings are already completed and approved by Dubai’s regulatory authorities. This minimizes the investment risks, and increases the chances of certainty.
- Easier to Get a Mortgage
When it comes to buying ready-to-move units, you can easily get a mortgage because lenders and banks are more comfortable in financing ready properties. It is because such properties are already built and easy to evaluate.
So you can easily get a home loan for it. Also, since there is no construction involved, you can get better loan terms or higher approval chances from the major banks in UAE.
- Can Qualify for Golden Visa
If the value of your ready property is AED 10 million or more, you may be eligible for a UAE Golden Visa. This gives you and your family long term residency in UAE.
- No need for a sponsor
- Ability to stay outside of UAE for more than 6 months
- Residency for your spouse and children
This is the reason many investors choose to move properties to get a UAE golden visa and enjoy the luxury lifestyle of Dubai.
Cons of Buying Ready-to-Move Property in Dubai
While ready-to-move properties offer certain benefits, it comes with its own set of challenges.
- Higher Upfront Costs
Ready properties often come within a higher price range as compared to off-plan projects in Dubai. Since they are based in developed areas, the buyer usually demands full market value for it.
This means that you might need a higher initial payment or you may need to secure a bigger mortgage for it. Thus, this makes the properties less affordable for many buyers.
- Limited Payment Flexibility
Unlike off-plan properties which offer the payment flexibility, ready properties often require a full deposit to be made at the time of purchasing. Or ready properties require:
- 20-25% minimum down payment
- Full payment upfront
This might disturb your budget because you are not ready for a larger payment.
- Higher Maintenance Costs
Ready properties which are usually older ones require an immediate upgrade. Even in well-maintained buildings, you need to spend money on:
- Appliance Upgrades
- Flooring
- Painting
- Plumbers or Electrical Repairs
- Competition in Rental Market
In developed and popular areas, there can be similar properties available for rent. This can cause high competition, which may:
- Delay finding tenants
- Force you to reduce the rent
As a result, your rental income might not be stable and consistent as expected.
Explore:
Dubai vs Abu Dhabi: Comparing UAE’s Top Real Estate Markets
Difference Between Freezone and Mainland in UAE
Conclusion
Off-plan and ready-to-move properties both offer good investment opportunities in Dubai, but they serve different needs.
Choose off-plan if you want lower prices and are willing to wait for future returns. Go for ready-to-move if you prefer immediate use or rental income and lower risk.
The right choice depends on your budget, goals, and timeline. Always do your research or consult a trusted real estate expert before making a decision.
Frequently Asked Questions
Is it good to invest in off-plan property?
Yes, investing in off-plan property is a smart choice because it provides a flexible payment plan, lower prices, and good potential for long-term returns.
What is the meaning of off-plan?
Off-plan properties are those who are still under construction and are not ready to be delivered. The clients purchase off-plan units based on the plans and designs.
Can I sell my off-plan property in Dubai?
Yes, you can sell your off plan property after you have paid at least 30% of the total value. However, we suggest you check with your developers before reselling your property.
What is the 1% plan in Dubai?
The 1% plan lets you pay 1% of your property value every month. It is a flexible payment plan with low monthly payments.
