Buying a new property might be a nerve-wracking experience, especially if it is your first off plan property to purchase. Most people are familiar with buying a ready property but have no idea on how to purchase an off plan property, most of these people are here because they heard from a friend or a relative that the returns on investments of an off plan property are pretty much high, which is often true. But to maximize profit and minimize risks you must follow a certain strategy that most successful investors use. Here in this guide we show you the winning formula on how to choose an off plan property.
Do your research
This is the first stage, in this stage you will need to do an in-depth research on all the properties that you are considering to buy. In this initial research focus on points such as property type, completion date, location, property developer and payment plans. I know that we will touch these points later on. But right now you have a list of properties that you are trying to filter out. You must carry with you to the next stages 2 or 3 properties to conduct further in-depth analysis.
Know your budget
Now this might sound bit obvious, but as a real estate agents at Unique Properties we found out a common mistake between the beginners. They often tend to calculate their budget with plans of paying more than 50% of their salary each month for the property. And this is ridiculous because contracts usually last two or more years and anything could change in this period. So it is always a wiser choice to have money saved up in your account before starting your plan.
Identify clearly the reason why do you want to buy the property.
Successful investors are usually those who have a clear sharp plan of the reason why they are buying the property. There are mainly three reasons why people buy an off plan property, I have listed them below.
Buying to sell the project on completion.
Buying to resell the property before completion.
Buying to rent the property on completion.
Now it is really important to know which one of these is your plan before carrying on with the next steps. This will affect your strategy, for instance if your plan is to sell you off plan property on completion, then you will be concerned more with buying the property really early to maximize your profit.
This has to be one of the most important point when choosing an off plan property, and usually investors think short term instead of long term when it comes to picking a location.
A good location for your off plan property must be ideally close to a good supermarket that will serve all you needs , close enough to a school, mosque or church , a mall and preferably a good distance from your favorite hobby whether that would be a beach or a football pitch.
However it is not enough to choose a location which is doing well now, in fact you would need to have a look at what are the future development to be built in this community and whether in the long run is it the type of environment you are willing to live in.
In general we encourage clients to invest in a developing community rather than a fully developed one, since the future returns will be generally be much higher for the developing community project.
Get an experts advice.
It is quite important to get an advice from a trusted real estate agent who has years of experience in the field.
With so much information available readily online, clients sometimes consider doing everything alone in order to save a little. But that is a huge mistake, as an expert real estate agent will have certain set of skills that will indeed save you from spending much more, these skills include price guidance, market condition knowledge, negotiation skills, professional networking , answering your questions after the deal and most importantly they are will educated with years of experience.
Research your property developer
It is important to conduct a research on the property developer. A common strategy to study a property developer is to look at their previous projects, how big where they, where they completed on time, brand name and much more. To help you with this it is better to refer to a real estate agent.
Study the payment plan.
Studying the payment plan is very essential, it is as important as the total price of the property.
Payment plans are usually represented as a percentage of the total price and are divided into 3 major payment stages, these stages are.
Certain percentage during the construction.
Certain percentage on completion.
Studying the payment plan is quite essential step for the buyer to do, since the buyer will have to study whether or not is the proposed payment plan in line with his/her financial expectations.
Read carefully the offer before signing
This is another stage in which an expert’s point of view will be handy. Often times what is in the offer is not 100% what the buyer intended. There are usually some points in between the lines that will not be clearly understood by a buyer who is purchasing his first off plan property, and this is completely fine. As long as you have an agent who will assist and explain to you in depth all these points.
Have a plan B always
Even though Dubai’s economy is ever growing and investing on a property here is really safe, the sad reality in today’s world is that anything could change at any time. So it is important to keep that in mind and ask yourself questions like, what if the property is delayed or not completed and how will I re-invest that money once it is returned to me.
Celebrate your choice
If you go across this list carefully, apply all the things we have
It is quite common human nature to hesitate when making a major decision in our lives, but once you
u could also read: Off Plan vs. Ready Property: Which is the best?
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