Given its ever-expanding and highly potential scope, the UAE property market possesses considerable investment potential. The emergence of new property developments continues to cater to the growing housing demand while presenting investors with lucrative opportunities. Moreover, the availability of payment plans for real estate projects makes investment convenient and feasible. For off-plan developments, project developers offer post-handover payment plans to investors and buyers. Amid all the entailing convenience, one concerning question remains: are post-handover payment plans risky for buyers? To answer this, let’s learn more about the purpose, benefits and potential risks of post-handover payment plans.
What Is a Post-Handover Plan?
Post-handover payment plans are strategic financial options offered by property developers to facilitate the buying process of real estate. These Dubai off-plan payments as per completion allow property investors in Dubai and other emirates to make payments feasibly in pre- and post-handover instalments.
According to most post-handover payment plans, investors are required to pay a 20% down payment to book a property. Specifically in a 40/60 payment plan, which is quite common, buyers need to pay 40% of the total price including a down payment before handover. After the handover, the rest of the 60% payment is made during the construction phase. It is a highly common payment plan in Dubai and across the Emirates.
Are Post-Handover Payment Plans Risky for Buyers? Evaluating the Pros and Cons
Let’s weigh some prominent pros and cons of payment plans available in the UAE. It will help us better evaluate the risks.
Pros Overshadowing Buyer’s Risk for Post-Handover Payment Plans
The risk of Buying off-plan property with post-handover payment plans is often overshadowed by entailing benefits. Here we have listed a few for the context.
Budget Feasibility
Budget feasibility is among the many reasons to invest in a Dubai off-plan property or any other emirate. As discussed, the breakdown of the total property price in a uniformly structured instalment plan makes investment convenient.
Real estate investors often refrain from investing due to hefty upfront property payments. That said, payment plans are meant to overcome such constraints in a strategic manner.
Payment Flexibility
Different types of payment plans further add to payment flexibility. When evaluating the process of buying off-plan property in the UAE, investors must also pay heed to payment options.
In post-handover payment plans, property buyers can make payments for up to 10 years. The common payment ratio include 10:90, 20:80, 40:60, 50:50, 60:40, 70:30 and 25:75
Value-For-Money
Properties offered in off-plan projects are usually cheaper than ready properties of the same stature. This allows investors to save money on property investment and secure a value-for-money deal.
Moreover, investors will have a wider choice to pick their desired home layouts within their budget. This also necessitates investors to expand their understanding of floor plans in Dubai and other emirates for an informed decision.
Post-Handover Payment Plans Potential Risk for Buyers: The Cons
Amid all these upsides, one can’t ignore the associated buyer’s risk in off-plan post-handover payment plans. Here are some downsides of off-plan payments investors should know.
Handover Delays
Any off-plan project can be susceptible to handover delay. There may be a host of reasons causing such a situation. It is among the potential risks of post-handover payment Plans for buyers. However, the UAE has a robust legal system governing the real estate sector.
Off-plan investors can effectively handle delays if they have the right know-how and understanding of the law. Expanding your legal knowledge about real estate is how to minimise the risk of property investment in Dubai or elsewhere.
Unexpected Results
This instance is very rare, especially in the UAE property market, which is extremely well-managed. However, the possibility of unexpected changes in the master plan or floor layouts can’t be ruled out. It can put the property investor in a tough situation as the end results won’t be up to their expectations.
However, strategising your investment will help prevent such a buyer’s risk in off-plan post-handover payment plans. By strategising we mean investing with renowned property developers in Dubai with proven track records.
Market Price Fluctuation
Another thing that investors dealing with post-handover payment plans are sceptical about is fluctuating market prices. It is also among the risks associated with buying off-plan property in Dubai. Again, given the rising property trends in the UAE in recent years, market fluctuations are going in investor’s favour. That said, investors should do thorough research and consult property experts before proceeding with investments.
FAQs
Do Post-Handover Payment Plans Pose a Potential Risk for Buyers?
Property buyers and investors with a vigilant approach can easily avoid any risks associated with payment plans. Hiring a real estate agent with knowledge and experience can also help overcome such concerns.
What is the 10-year post-handover payment plan in Dubai?
As it implies, buyers are allowed to pay instalments for up to 10 years to own a property in such a payment plan. However, the payment terms and conditions may vary from case to case.
What does the post-handover payment plan mean?
The literal post-handover meaning is anything that is done after the intended handover (property handover, for instance). Consequently, the term ‘post-handover payment plan’ means a price plan in which full or partial payments are made after the property handover.
There you have it – a detailed answer to the question: are post-handover payment plans risky for buyers? Aspiring investors can also weigh the difference between mortgages and payment plans to choose a financially feasible option.
The option of mortgage financing extends to ready properties. The availability of such home loan options makes buying property in the UAE a more financially viable option.
For more on the post-handover payment plans potential risk for buyers, keep reading dubizzle real estate blogs.
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