Off-Plan vs. Ready Property: What is the Better Option?

Dubai’s property market is deemed the world’s most preferred real estate investment destination. Locals and as well as foreign nationals invest in Dubai’s property sector, given its substantial gains and potential for long-term appreciation. Real estate investment also acts as an inflation hedge because the value and rent of property tend to increase during inflationary periods. 

Considering the vibrant and ever-evolving real estate market of Dubai, investment in the real estate sector is deemed a lucrative investment. It is a wise decision to enter Dubai’s property market and build wealth through real estate investment. Indisputably, Dubai’s real estate investment pays you rewards. However, one must find out specific objectives and understand the nature and scope of investment to capitalize on this vibrant market.

Off-Plan Properties

The property that is still in the construction phase is called an off-plan property. It is a type of property that has yet to be completed. Both pre-construction and under-construction projects fall into this category. If a property is still being developed, it will be called an off-plan property. Mainly, structural blueprints are used to buy and sell off-plan properties. A customer normally pays a decided chunk of payment or a deposit in advance and then pays the remaining cost of that particular unit in installments. 

Let’s Explore the Benefits Of Off-Plan Investment

Potential or capital appreciation

First of all, buying a property at an early stage allows buyers to benefit from lower prices compared to the market value upon completion of that specific project. The initial cost of these properties is also lower, which leads to capital appreciation over time. Furthermore, Dubai’s dynamic real estate market and rapid development lead to substantial capital appreciation over time.

Lower price

Off-plan properties can be purchased at a lower price than completed projects or properties. Developers often offer fascinating incentives and discounts to generate capital for the development of a project. Pre-construction prices are quite low and feasible compared to other options.

Flexible payment plan

Developers offer flexible payment plans to accommodate buyers with varying financial circumstances. Buyers also enjoy the luxury of spreading their payments over the construction period or beyond completion. This advantage helps buyers to manage their finances and purchase a desired real estate unit without disturbing their budget.

Property filling

Buying off the plan in Dubai also assists people involved in the property filling business. The term “Property Filling” refers to the reselling of a property quickly after buying it for profit. It is understandable that the value of property appreciates over time. Given that, many investors or buyers resell their properties quickly for a profit.

Option to choose a suitable unit

This type of investment option in Dubai offers the opportunity to select from a diverse range of units and locations within a development. An investor usually has several options to choose from. He can purchase the most suitable option based on his investment goals and preferences. An investor can select a unit with a preferable layout, location, view, etc.

Challenges Involved In Buying Off-Plan Properties In Dubai:

Delayed Occupancy

It takes time to get occupancy of such a property. An investor has to wait until the property is ready for possession. Given that these properties are bought during the construction phase, a buyer must wait until the project is completed. Waiting time can vary from project to project. Additionally, a buyer should not ignore the possibility of unforeseen delays in construction.

Buying through references

While buying an off-plan property, an investor has to rely solely on references and renderings. He will be presented with blueprints or brochures of a project at the time of investment. So, there is a possibility of encountering differences in finishes, layout, or overall quality, leading to dissatisfaction.

Mortgage-related issues

It is quite difficult to obtain mortgages for off-plan properties. Lenders may be hesitant to extend financing for properties that are yet to be completed. It seems risky as compared to already constructed properties. So, investors may face challenges in securing financing.

Considerations For Off-Plan Properties:

Developer reputation

You must always consider a reputable developer while buying off-plan projects. It is crucial to research the reputation of a developer to create an element of confidence. The project is under construction and has not been completed. So, you need to choose a developer whom you can trust and rely on.

Market conditions

You also need to evaluate the market conditions. Analyze factors, trends and the market propensity before buying an under-construction property. This assessment will help you in making an informed decision.

Completion Timeline

Carefully analyze the completion timeline given by a developer. Although you certainly have to wait for a specific time to get possession, you should evaluate the status of the development and completion timeline to avoid unnecessary delays.

What Is The Opposite Of Off-Plan Property?

The opposite of an off-plan property is a ready property, which is a fully constructed property. However, off-plan properties are under construction or yet to be completed. 

Ready Properties:

A property that is completed, fully constructed, and prepared for instant occupancy is called ready property. It is a real estate unit that is fully prepared and is ready for immediate occupancy. Investment in ready properties is deemed a wise decision because it leads to immediate returns in the shape of rental yields. Generally, an investor has to pay the full amount upfront to secure the ownership and possession of ready properties. 

Advantages of investing in ready properties in Dubai

Immediate possession

In this investment, you do not have to wait for years to get occupancy or possession. An investor or buyer can move in immediately after buying this property. He may also rent it out after purchasing, leading to immediate rental yields.

Ready product

It is a fully completed property and is ready to use. An investor can physically inspect this property to find whether it resonates with his desires and aspirations. You do not need to rely on layout or blueprint because everything is there in front of you to inspect, analyze and choose.

Established localities

Ready properties are often located in well-established communities. Buyers can start living in their purchased properties. Given their locations, they also enjoy high-end facilities and amenities, enhancing their quality of life and contributing to a convenient living environment.

Rental income

An investor can start living immediately or rent this purchased property out to earn rental yields. It is deemed an attractive option for investors seeking steady cash flow from their investments because they can promptly put their properties on the rental market and start getting income.

Challenges For Ready Properties:

There is no option for modification

Investment in off-plan properties allows you to modify your unit based on your taste. However, if you invest in a ready property, you will not be able to enjoy this luxury. It is a completed project, and an investor cannot alter its features and has less control to modify it further.

Higher prices

Ready properties are considered more expensive than off-plan properties. Flexible payment is not an option. In most cases, investors have to pay a full amount or a big chunk of the amount upfront to buy a ready property.

Older products

Ready properties are considered older products than off-plan properties. They may lack some of the modern features and amenities available in newly developed or upcoming developments. 

Considerations For Ready Properties

Appreciation Potential

The potential for value appreciation is limited in ready properties as compared to off-plan properties. You may receive immediate rental yield, but in the long run. However, the capital appreciation may be lower. So, you need to evaluate the appreciation potential of a property before buying it.

Maintenance costs

The possibility of maintenance costs in ready properties cannot be neglected. Evaluate a property that you are going to purchase to assess maintenance-related expenses and manage your finances.

Limited customization

It is difficult and expensive to modify already-built infrastructure. So, they may offer limited customization options as compared to off-plan properties where buyers have the opportunity to select finishes, layout, etc. 

Final Thought:

Real estate investment in Dubai’s property market is deemed a lucrative investment, given the development standard of Dubai and the relentless growth of the property sector. The interest of developers is increasing over time because of investment-friendly policies of the government, favorable business environment and luxurious living options. However, investors have to decide between ready and off-plan properties in Dubai for their investment.

Off-plan properties are affordable and attractive because of flexible payment plans. However, immediate possession is not an option in this case. On the contrary, investment in ready properties offers immediate possession, but it also involves maintenance costs. So, an investor should choose between ready and off-plan properties based on the market scenario and personal preferences.