When investing in international real estate markets, it pays to learn the vocabulary used in those markets. The terms used in one nation usually are not the same as the ones used in your home nation.
One set of those different real estate terms is off-plan and ready to move. Not knowing what these terms apply to can lead to not understanding the Dubai market and places you in the make-a-tough decision category.
Once you understand what those terms mean, your purchase decision becomes much easier as you know what you are looking at during your investment research.
What Is An Off-Plan Property?
The term off-plan refers to those properties where construction of the home, villa, or apartment has either not begun or is still under construction. They are not ready to move into the type of properties as there is still a lot of building work to be completed first.
The appeal of these properties is that investors often can buy them at lower prices. This lower purchase cost helps them earn a bigger profit when it comes time for them to sell.
The other appeal to off-plan homes is that you can participate in the construction process and add a few tweaks to the design to fit what you need and want.
What Is Ready To Move Property?
Another descriptive term for this type of property is ready-made and both terms say exactly what they mean. These properties have been completed and are in move-in shape.
You just pay the purchase price, collect the keys to your new home, and then move right in. The sale of these properties is just like anywhere else in the world.
You make an appointment with your real estate agent, tour the house, and make your offer. If the offer is accepted, all that is left before you move in is the paperwork.
The Advantages Of Buying Off-Plan
There are roughly four main advantages of buying this type of home.
- Capital appreciation- these homes are not as expensive to buy as ready-made homes. This provides a great investment opportunity as long as housing values continue to rise
- Flexible payment options- Dubai developers offer a variety of payment options making investment more attractive to investors
- Better location choice- investors can pick the property they want no matter where it is in the development unless it is already sold
- You get modern features- ready-made homes are as is and it would be costly to renovate them. An off-plan home allows you to incorporate newer features as well as other amenities
Advantages Of A Read-To-Move Home
- You move right into the home that is vacant and waiting for you and your things to move in. There is no delay or waiting for further construction to take place
- What you see- is what you get. You can inspect the finished product and see if it aligns with your things and lifestyle. Plus, you see its condition.
- Existing amenities- ready-made homes are built in communities that already have schools, shopping outlets, and other amenities. There is no waiting to see what will be built in the community as it is already there.
- Rental income potential- if you are buying the home as an investment, you can see an immediate return on your investment through rental fees.
What To Consider When Buying An Off-Plan Home
- The developer’s reputation- Do some good research to connect with the developer with the best reputation
- Market conditions- Will the home’s value meet or surpass market trends upon completion
- Completion timeline- You need to know when the house will be ready so you can make your ownership plans. You will need some patience here
- Possible delays- This is always a concern when it comes to off-plan homes. Delays can happen at any time and for any reason.
What To Consider When Buying A Ready-To-Move Home
- Selling price may not be negotiable- There is less flexibility in the price once the house has been completed
- Capital appreciation may be lower- You are paying a higher price so your ROI may not be as great as buying an off-plan home
- Maintenance costs- The age of the home may influence its condition and you need to be prepared to repair different areas of the home after moving in.
- Limited room to renovate- There is little flexibility to add or change designs to the home
And as always in real estate, location plays a heavy role in housing costs and attractiveness. Before you buy an off-plan or a ready-to-move home, you need to consider what neighbourhood it is in.
Location! Location! Location! Is a standard even in international real estate investing.
Rent To Own
This has been a growing trend in the Dubai real estate market. There are many people who rent because they cannot afford a down payment. This has led to the importation of the lease option real estate model into Dubai.
The way it works is the same as it works in most Western countries. The renter adds between 20 and 30% to their monthly rental fee for a fixed period of time. The extra payment adds up and is considered to be their down payment.
Once the down payment has been achieved, the renters can pay off the house with cash or a mortgage from the bank. The cost of this new trend will be higher in the long run.
Some Additional Words
When you are looking for a new home or real estate investment in Dubai, contact our estate office. Our trained and well-experienced estate agents have the knowledge and skill to lead you to the best deal o matter which plan you use.
Getting you into your new home at the right price is our business and we take that responsibility seriously. Call us today to see what our top-flight agents can do for you when you are not sure if off-plan or ready-made homes are right for you and your investment plans.
