Off-plan Property Investment: A Step-by-Step Guide for Beginners

Off-plan property investment in Dubai’s real estate market is a popular choice for many individuals due to its lower prices compared to finished properties. But, these lower prices often come with inflated risks. Investing without the proper knowledge can cause big problems, and an inexperienced investor can easily make some obvious mistakes. If you are a beginner and want to invest in off-plan properties in Dubai, you will have a lot of options at multiple locations with different ROIs, benefits, and risks associated with these properties. Hence, the vastness of the market can be confusing for many investors. So, to make sure that you get the best out of your off-plan property investment, we have compiled a step-by-step guide for beginners to buy off-plan properties in Dubai.

1. Clear Your Mind About What You Are Looking

The first step you should take when looking for off-plan investment property is to have a clear mind about what you want. You must have a list of things that you should understand when thinking about off-plan property investment, such as ROI expectations, budget, developer preference, amenities, location, payment plan, property type, capital gain, and additional costs. 

2. Hire an Experienced and Trusted Real Estate Agent

You must hire an experienced and well-reputed real estate agent or agency, such as Betterhomes, to help you with the investment process. Real estate agents often have long-standing relationships with good property developers. A real estate agent is your representative in this process and ensures everything goes smoothly and in order, such as handling the contract and handover process. They will pick the best properties according to your budget and preferences and update you regularly. Before hiring a real estate agent, you have to make sure that they are registered with the Dubai Land Department and RERA (Real Estate Regulatory Agency) Dubai.

3. Shortlist The Right Property

After you hire a trusted and experienced real estate agent and specify your budget, tastes, and preferences, they will provide you with a list of properties that fit your requirements. The list will have an overview of the shortlisted properties to help you make the right decision. After that, you can start visiting the properties on the list with your agent to get a clear understanding of the pros and cons of shortlisted developers. Most Developers in Dubai have mock properties to display the off-plan property facilities, amenities, sizes, and layouts. It will give you a clear idea of what you can expect from potential off-plan property after the completion.

4. Book Your Off-plan Property

After selecting the property from your shortlisted off-plan project, you can visit the developer’s sales office and select the exact unit you want to reserve. To make the property yours and take it off the market, you are required to make an initial deposit of a certain percentage of the property’s price, which is different for every developer. Also, you have to sign the booking form and SPA (Sales Purchase Agreement) for your selected property. Having a real estate agent on your side will help you get a good deal for your off-plan investment property.

5. Submit the Down Payment

After signing the booking form and paying the fees, you have to pay the first instalment or the down payment, whatever is decided in your agreement, to the developer according to your selected payment plan. Also, you are required to pay a DLD fee of 4% of the total price of the property. In Dubai, the DLD fee is legally divided between the buyer and seller, who pay 50% each. However, in most cases, the property buyer pays the fee entirely. This step is extremely important because, after the payment, your purchase becomes registered in government records. You also have to make sure that all the payments are made only in the escrow account.

6. Sign the SPA

After clearing all the payments, you will receive your initial sale contract from DLD. Whether you reside in the UAE or any other country, the developers are bound to send you the SPA. The authorised signatory must also sign the SPA from the developer’s end before sending it to you. It is important to get legal advice before signing the SPA. Getting legal advice from an expert will help you understand the terms and conditions of the agreement.

7. Settle Due Installments

According to your selected payment plan, you must pay a specific percentage of the property price to the developer before the completion date of your off-plan property. Settlement of the due instalments before completion will make you fully eligible to receive the property.

8. Project Completion Date

According to the SPA signed by both parties, the developer is obligated to complete the off-plan project and hand over the property to you on a pre-decided date. After the completion of the off-plan, it is the responsibility of the developer to send completion notices to all the clients.

9. Property Inspection and Handover

After you have settled the pre-decided payment amount for handover according to your payment plan, you and the developer can mutually decide on a date for the property inspection. You can hire a professional inspection company along with your real estate agent for the property inspection before the handover. Once the inspection is complete and your inspection team gives you a call to go ahead, you can ask the developer to hand over the property. 

After completing the above step-by-step process, you can start the move-in process. You can also get help from your realtor to make your moving-in experience hassle-free. To learn more about buying an off-plan property in Dubai, contact us today!