Off-plan property offers numerous benefits such as low entry prices, capital appreciation, and high return on investment, which makes Dubai’s off-plan property sector an investor’s paradise.
The risk-reward scenario can be very tricky for investors, especially for First time investors.
If you’re expanding your portfolio or investing for the first time, follow this list of the top 5 mistakes to avoid when investing in Dubai’s off-plan properties.
1. Ignoring the Developer’s Track Record
One of the most common oversights is that the developer’s history and track record get ignored because of fancy brochures and promises of quick completion.
Before investing, always do your homework because not all developers add equal value.
Some construct high-value projects within a check, while others have a history of running into delays and regulatory issues.
2. Focusing Only on the Price Per Square Foot
Evaluating off-plan properties purely based on price per square foot could yield inaccurate results and sometimes even blunders!
Investors looking at off-plan housing projects on sale for lower prices should think about what is included in that price, it likely will come with compromises such as:
– The location and its potential demand in the future
– Quality of the building
– Amenities in the community
The best investment isn’t always the cheapest per square foot, but the one that provides the greatest value in the long run.
3. Not Understanding the Payment Plan
As with most off-plan projects, flexible payment plans are usually available, but most investors tend to get trapped here.
Some payment plans may be loaded with a hefty payment on handover, while others evenly distribute payments throughout the construction period.
4. Skipping Legal and Regulatory Checks
The real estate market of Dubai is regulated by RERA (Real Estate Regulatory Authority), but that doesn’t mean you can skip due diligence. Investors sometimes assume the paperwork is “standard”, and that’s where problems begin.
Avoid this issue by verifying whether the project is registered with RERA or not. and also by consulting a real estate lawyer or advisor before signing anything
5. Underestimating Exit Strategy and Market Liquidity
Many investors go in with a plan to sell the property right after handover, but market conditions might not always cooperate.
You need to be realistic about resale value, future demand, and the time it may take to find a buyer
Tip: Choose projects with high rental potential. Even if you can’t sell immediately, a good rental yield keeps your investment performing.
Conclusion
The off-plan property market is potent, promising, and if approached wisely, highly rewarding.
But to succeed, it’s essential to look beyond the surface and do your homework.
Avoiding these five mistakes could be the difference between a profitable investment and a costly lesson!
