When buying an off-plan property in Dubai, there’re a few considerable factors to look at! As the city is under rapid development, choosing the most suitable area comes first. With a flood of lucrative real estate projects, finding the right one is mostly overwhelming. Here’re a few tips ensuring you make a right move especially when it comes down to off-plan property.
The first step involves research about developer, their work history and type of real estate projects they offer. Ever since the first property slump, developers now have to purchase the land beforehand while all taxes received are transferred in a collateral account. This account is however accessed per RERA directions; only for construction purpose! Buying off-plan today is more secure as compared to 2008 but investors should always remain watchful.
2. Financial dealings
It’s possible you’re running low on finance! If that’s the case, widen your research as only limited number of banks and financial institutions are willing to lend, thus alleviating the risk level. Banks usually lend around 50 percent loan to value (LTV) but finding such would take time. Payment plans are to be considered as well and should meet your budget and purchasing time frame.
- Possible restrictions
To prevent another real estate recession, more restrictions are vested on developers while reselling off-plans purchase. A few developers would only allow 40 percent disbursement whereas others have no specific limitations. Still, all of this depends on how quickly one is buying or selling a property so you’ve to move strategically and with precision.
- Talk to the developers
Let’s say you plan to buy property in Dubai Marina, its important holding a one-on-one meeting with developer. Make sure project isn’t stalled and if it does, what’s the reason. As real estate investment involves serious financing that probably impacts over lifetime, there’s no room for mistakes or you might face serious monetary and legal impediment. Perform in-depth analysis on developer’s history and visit project site that has been completed. If possible, ask bank or particular financial institution about credit history prior investment.
Location matters most as potential buyers are likely to invest in a property that caters basic amenities. This involves 24/7 availability of water, electricity and gas, easy access to public transport facility, grocery market, healthcare and recreational facilities and most importantly; promises a safe and quality living.
6. Know landlord/tenant laws
Lest you’re new to Dubai, property rental is the only available choice. Know the rental laws to avoid inconvenience and argument. As per “Law 33” of 2008, landlords have the right to request eviction in between rental term if they or any of their blood relation plans to move in immediately! However, this notice should be given 12 months in advance whereas the “two-year” rental law isn’t legal anymore.
Landlord is restricted from re-letting property for two years only if eviction is due to above reason and must prove there’s no alternate real estate under his possession. If he’s reselling the property before two years, refer to Memorandum of Understanding (MOU) and file a legal complaint. In-short, understanding real estate laws is much important.
Carefully understand the legal procedure when buying/renting property in Dubai. Readers are encouraged to consult law firms for further clarification.