The UAE offers numerous real estate opportunities. There are two types of property investments: off-plan and ready properties. The former is a project that is still under construction or is in the pre-construction phase. Whereas ready properties or on-plan properties are ready-to-move-in properties available for immediate occupancies.
That said, both the property types have their advantages and disadvantages. Let’s go through off-plan property vs. ready property in detail to find out which option is best for investment.
Off-Plan Property
Off-plan property projects are those that are still under construction or have to be developed. Customers interested in off-plan properties usually buy based on structural blueprints or the floor plan in addition to the developer’s reputation.
When comparing off-plan property vs ready property, buyers usually invest in the former because of flexible payment plans, and chances of maximum profitability when the project completes. Here is a guide to buying off-plan property in the UAE for those interested.
Advantages of Off-Plan Property
Following are some common advantages of off-plan property plans:
Flexible payment plans
The payment plans for off-plan properties are flexible. Moreover, these projects are less expensive when compared with ready properties. Developers give incentives and discounts to attract potential buyers to make early investments. Here are the pros and cons of off-plan payment plans.
Customisation
Buyers have the option to customise floor plans and select the fixtures and finishes of their preference.
Maximum Return on Investment
With a minimum investment, there are more chances of getting higher returns. Buyers usually book off-plan properties as soon as they are announced. Also, as the project gains value and the construction advances, the chances of maximum ROI increase.
Safe Investments
Even though investment in off-plan properties is considered when comparing the difference between off-plan property vs ready property, the RERA and DLD have taken special measures to keep investments safe. The off-plan project developers can access buyer funds when the project reaches a certain level of completion. Moreover, the buyers are required to pay for the off-plan instalments or make down payments only at the DLD-approved banks.
Lucrative Property Market
Dubai’s property market is lucrative with several off-plan property projects. Buyers can find off-plan villas and apartments alike and select the one according to their budget.
Disadvantages of Off-Plan Property
When comparing off-plan property vs ready property, consider the following disadvantages of investing in off-plan projects.
Delays
There can be construction delays which could postpone the handover date of the project. This is a disadvantage for investors and users, alike. End-users may want to move into the project on the handover and possession date while investors might want a faster return on investments by renting or selling the property. Here is how to handle delays in hand-over of off-plan properties.
Uncertainty
Buyers don’t have any assurance that the end project will meet their expectations in actuality. Although there are customization options and contracts to bind developers, there is uncertainty. Moreover, there are no profits for investors until the project completes.
Ready Property
Evident from its name, ready property units are those that are available for immediate occupancy. These ready-to-move-in properties are built fully and comply with the rules and regulations set by the government. Moreover, owners of ready units can re-sell their property or rent it at any time.
Advantages of Ready Property
When considering the difference between off-plan property vs ready property, ready properties have the following benefits.
Immediate occupancy
Ready projects are available for immediate possession and occupancy which means individuals can move in the units as soon as they buy the property. Moreover, investors can also re-sell or rent the units and gain maximum returns or rental yields.
Reduced risk
Since the project is already developed there is minimum risk of delays or unexpected issues such as changes in building specifications that can arise during the project’s construction phase.
Established location
Ready properties are usually situated in established neighbourhoods that have amenities and facilities such as retail outlets, schools, hospitals and public transport options.
Disadvantages of Ready Property
Following are some of the disadvantages of ready properties.
Higher prices
The prices for ready projects are on the higher side when compared with off-plan properties.
Limited customisation
When comparing the difference between off-plan and ready properties, there is limited scope for customisation in ready properties as they are already built and finished.
Potential depreciation
The value of ready properties can depreciate or they can experience slower capital appreciation depending on the market conditions.
Those were the advantages and disadvantages of off-plan and ready properties. The decision on which type of property is best for investment depends on several important factors including individual preferences, market conditions, financial goals and risk appetite.
Here is a checklist for off-plan properties in Dubai. Besides, if you are interested in purchasing ready properties including villas and apartments, go through these properties for sale in the UAE.
Stay tuned to dubizzle’s property blog for more on off-plan and ready properties.
