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Types of Payment Plans for Buying a Property in Dubai

Posted by Kelt&corealty on May 28, 2024

Rent-to-own property, payment in installments until handover and post-handover payment plans are a few popular types of payment plans for buying a property in Dubai. This versatility in payment plans caters to a diverse range of buyers and accommodates different financial situations and planning preferences, creating a more dynamic and inclusive real estate market in Dubai.

Dubai has become a popular destination for real estate investment. Its development standards, living ambiance, investment-friendly policies and tax evasions attract real estate investors from all around the globe. Additionally, its capacity to generate high ROI, distinct lifestyle experiences and magnificent infrastructure incite people to start and expand their businesses and choose it for their living destination.

The real estate sector in Dubai extends a wide range of properties such as apartments, townhouses, villas and penthouses. Besides ready-to-move-in properties, investors can also invest in off-plan properties or under-construction properties. Amid these comprehensive investment options, potential buyers or investors can find several types of flexible payment plans for buying a property in Dubai. 

Types Of Payment Plans For Buying A Property In Dubai:

Rent-To-Own Payment Plan

Rent-To-Own (RTO) payment plan allows buyers to rent an opted property for a specific period with an option to purchase it before the end of the lease term. In this payment plan, a tenant becomes the owner once the agreement finishes. This type of contract allows a buyer to build equity in a property and is deemed a suitable option for those who cannot make a down payment because of a lack of financial resources. 

Rent-To-Own Payment Plan

People who prefer ready-to-move-in property can choose this payment plan because, with this payment plan, they can move to that property in a matter of a few days. It is considered a convenient and efficient way to own a home with limited financial means. The tenant pays the rent as a down payment and the remaining payment can be made upfront or via a mortgage.

Benefits Of the RTO Payment Plan

  • A buyer can own a home or purchase a property without making a large upfront payment
  • Over time, a buyer builds equity in that particular property by making consistent payment
  • This payment plan allows buyers to move into a particular property within a week or two
  • The property price is decided at the time of the agreement and it remains the same 
  • Rental payments contribute towards ownership of a property
  • A buyer can also improve his credit score via rental payments

It is important to mention that in this case the property prices and annual rent are more than the actual average market price.

Post-Handover Payment Plan

This payment plan allows buyers to make the payment after the property is handed over to them. After paying a decided payment, the property is handed over to the potential buyer and he can make the remaining payments through rental yields. This financing structure enables a buyer to make payments in installments after the property is handed over to him. A potential buyer can move to a property after paying a decided percentage of the payment. 

This payment plan is eligible for both ready-to-move-in and off-plan properties in Dubai. Investors can purchase apartments, townhouses and also commercial units via this financing method. The ratio of initial payment is not fixed and it changes from project to project.

Benefits Of Post-Handover Payment Plan

  • Buyers can move to their respective properties or start living in newly purchased properties without making full payments
  • Investors get immediate possession in this type of contract and even they can make remaining payments by generating rental yields
  • After paying a certain portion, the remaining dues are paid in installments, facilitating people who have less financial resources
  • The overall cost of a property is decided at the time of the contract or agreement and it does not fluctuate because of market volatility
  • People with limited resources can own a home or use their cash elsewhere because this payment plan requires less down payment

Payment In Installments Until Handover Payment Plan

Payment In Installments Until Handover Payment Plan

Payment in installments until the handover payment plan allows buyers to pay a certain percentage of the total value of a property at various stages. The total value is divided into two different stages. Both parties can agree on a specific ratio such as 60:40, 50:50, 10:90, 20:80, etc. After paying the down payment, the remaining payments are made in installments. For example, if you have a 60: 40 payment plan then you have to pay 60% in installments and 40% at the time of the handover of the property. 

Benefits Of This Payment Plan

  • The total cost is spread over the construction period, reducing the financial burden of buying a property
  • The payments are made in installments that allow buyers to manage their finances
  • The upfront cost is also lower, allowing people to buy a home or apartment with little savings
  • It involves lower risk because this payment plan is related to the construction progress 

1% Payment Plan

Reputable developers in Dubai also consider this payment plan to facilitate investors and reduce their burden. Buyers have to make 1% of the total price as a monthly installment until the full payment is covered. 1% of the total amount is paid each month in the form of installments. It is deemed a flexible payment plan that not only reduces the upfront cost but also involves a mere 1% of the total amount as a monthly installment until the full payment is cleared. 

Benefits Of 1% Payment Plan

  • Only 1% of the total payment is paid each month, making investment or buying a unit more easy and affordable
  • Buyers are not required to pay large lump sum payments, enabling them to manage their finances effectively
  • Attracts people with limited savings to own a home or enter the real estate market

The Bottom Line:

Dubai’s real estate market has earned a commendable reputation because of its matchless offerings. It extends high-end facilities and amenities, an advanced living environment and a favorable business ambiance. Furthermore, the initiatives of the government, tax evasions and flexible payment plans such as rent-to-own payment plan, 1% payment plan, post-handover payment plan and payment in installments until handover payment plan makes Dubai’s real estate a lucrative option for real estate investment.

Whether you want to live a splendid lifestyle, enjoy the epitome of luxury and serenity, or expand your business, Dubai is one of the best destinations. Further, the versatility of payment plans attracts investors and also allows people to make a purchase with limited financial resources.

Struggling To Find A Property In Dubai: Get Our Assistance

Kelt & Co Realty offers its real estate services to people who aim to explore Dubai’s real estate market. Whether you are a first-time investor and want to buy a residential or commercial property, a foreigner who intends to invest in Dubai’s property sector, or an experienced investor who seeks further investment options, our real estate experts have solutions for all. Our professionals strive to deliver the desired results and cater to the needs and requirements of clients to meet their ends.


Can I pay fully in cash to buy property in Dubai?

Yes. You can pay the full amount of a specific property in Dubai in cash. It is an option to pay the full property value upfront in cash in Dubai. Although it is a possible option but many people prefer to consider other payment methods to use their funds for other purposes.

What is the profit payment plan in Dubai?

This payment plan allows buyers to pay a small portion of the total value in advance and the rest from the rental income of resale profit. After making a small payment, you can generate rental yields and pay the remaining dues. Also, a buyer can resell a property and clear the remaining payments from the profit.

Is there a penalty for delayed payments?

Yes. Developers have the right to impose late payment fines. Delayed payments can lead to penalties in Dubai and even prolonged delays can also lead to the cancellation of a purchase contract.

What is the 1% payment plan for Dubai’s properties?

Under this agreement, a buyer needs to pay only 1% of the total value of a property as a monthly installment. Payments are usually stretched over an extended period under this type of contract as 1% of the full amount is paid each month until the payment is cleared. 


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