Payment Plans for Off-plan and Ready to Move in Property in the UAE

Flexible Payment Options for Off-Plan and Ready-to-Move Properties in the UAE

By Rocky Real Estate

Type of payment plans for buying properties in Dubai

Flexible Payment Options for Off-Plan and Ready-to-Move Properties in the UAE

Payment Plans for Off-plan and Ready to Move in Property in the UAE

There are different factors that you need to consider when buying off-plan real estate in UAE. Chief among them would be the available payment plans. In fact, most people shy away from buying off-plan properties because of lack of awareness of affordable payment plans that could beat mortgages. Off-plan properties are generally cheaper and of the latest quality providing great payment plans so that you don’t have to scrape through mortgages to invest in real estate in UAE.

It is important to note that buying real estate property is a big investment. Thus, it is important to know how you are going to pay for it. Both off-plan and ready to move in projects in Dubai come with various payment plans and understanding them makes a huge difference.

Why payment plans are crucial?

A Dubai real estate is not free unless it is given to you. In most cases, you have to pay for it. The question now is, how?

This is where payment plans come in. Because of competition within the real estate industry and the desire of developers to sell their products, various payment plans are made. This allows buyers to gain the flexibility of paying for their purchased property. Payment plans help them pay off their purchases in such a way that best works for them.

What are payment plans?

As mentioned above, there are various payment plans available in Dubai’s real estate market. Payment plans differ from one project or developer to another. As this might be the case, there are some common payment plans that you should be aware of.

For off plans, most developers offer up to 3 years’ post-handover payment plans. For example, if the property’s scheduled completion would be in 2021, you would most likely get a six-year payment plan.

For ready to move in Dubai properties, payment plans may last 5-20 years, depending on the developer.

Again, this can be a case by case basis. To learn more about payment plans, you would need to directly get in touch with the developer.

Samples of payment plans

To gain a deeper understanding of how payment plans work, here are a few properties you might be interested in.

  • SAAM Vega in Pyramids Park by Falconcity of Wonders
    • 55/45 3 years post-handover payment plan
    • Completion: Q3 of 2021
  • Ruba in Arabian Ranches III by Emaar
    • 55/50 5 years post-handover payment plan
    • Completion: March 2023
  • Rawda Apartments in Townsquare Dubai by Nshama

Flexible Payment Options for Off-Plan and Ready-to-Move Properties in the UAE

Dubai’s real estate market offers a diverse range of properties, both off-plan (under construction) and ready-to-move-in. To cater to different financial situations and risk appetites, developers present various payment plans for buyers and investors. 

Understanding the common types of payment plans in Dubai is crucial for making informed decisions in 2024.

Off-Plan Payment Plans

  • 60/40 Payment Plan

A popular option when buying off plan properties Dubai requires a 60% down payment spread across installments during construction. The remaining 40% is due upon handover, offering a balance between upfront cost and post-handover burden.

Example:

Installment Payment Milestone
Down Payment 20% On Booking Date
1st Installment 10% Within 9 months from booking date
2nd Installment 10% Within 15 months from booking date
3rd Installment 10% Within 21 months from booking date
4th Installment 10% Within 27 months from booking date
Final Installment 40% On Completion

 

  • 70/30 Payment Plan

This plan demands a larger initial investment, with 70% paid during construction and 30% at handover. It suits investors comfortable with a higher upfront cost potentially offset by property value appreciation during construction. A real estate investment is costly, so investors must plan their finances and allocate their resources wisely to avoid losses.

Example 

Installments Payment (%) Milestones
Down Payment 20% On Booking Date
1st to 5th Installment 5% Within 7 months (1% monthly) from booking date
6th Installment 5% Within 8 months from booking date
7th to 11th Installment 5% Within 13 months (1% monthly) from booking date
12th Installment 5% Within 14 months from booking date
13th to 17th Installment 5% Within 19 months (1% monthly) from booking date
18th Installment 5% Within 20 months from booking date
19th to 26th Installment 8% Within 28 months (1% monthly) from booking date
27th Installment 5% Within 29 months from booking date
28th to 30th Installment 3% Within 32 months (1% monthly) from booking date
31st Installment 2% On 80% Completion Milestone
32nd Installment 2% On 90% Completion Milestone
Final Installment 30% On Completion

 

  • 40/60 Payment Plan

This option requires a lower initial investment of 40% during construction, with the remaining 60% due in full at handover. Such payment plans for buying a property cater to buyers needing more time to accumulate funds but demand a larger lump sum later.

Example

Installments Payment (%) Milestones
Down Payment 15%+4% DLD On Booking Date/ Admin fees within 21 days
1st Installment 3% Within 90 days from booking date
2nd Installment 3% Within 180 days from booking date
3rd Installment 4% Within 270 days from booking date
4th Installment 5% Within 360 days from booking date
5th Installment 5% Within 450 days from booking date
6th Installment 5% Within 540 days from booking date
Final Installment 60% On Handover

 

  • 80/20 Payment Plan

With a significant upfront cost of 80% during construction, this plan minimizes the post-handover financial burden. It might be suitable for cash-rich investors buying off plan properties in Dubai Creek Harbour who are seeking maximum leverage from potential property value growth.

Example:

Installment Payment Milestone
Down Payment 10% On Booking Date
1st Installment 10% Within 2 months from booking date
2nd Installment 10% Within 8 months from booking date
3rd Installment 10% Within 14 months from booking date
4th Installment 10% Within 20 months from booking date (Upon 20% Construction Completion*)
5th Installment 10% Within 26 months from booking date (Upon 40% Construction Completion*)
6th Installment 10% Within 31 months from booking date (Upon 60% Construction Completion*)
7th Installment 10% Within 36 months from booking date (Upon 80% Construction Completion*)
Final Installment 20% Upon 100% Construction Completion

 

Ready-to-Move-In Payment Plans:

50/50 Payment Plan

For investors who wish to buy ready to move-in properties in Dubai with payment plans, a 50/50 payment plan is the ideal choice. This balanced approach splits the total cost equally between an upfront payment and the remaining amount due upon handover. It offers a good compromise for buyers who want some time to manage their finances.

Example

Installments Payment (%) Milestones
Down Payment 10% On Booking Date
1st Installment 10% Within 60 days from booking date
2nd Installment 10% AT 20% Construction
3rd Installment 10% AT 30% Construction
4th Installment 10% AT 40% Construction
Final Installment 50% On Handover

 

Unique Payment Options

 

  • 10/90 Payment Plan

This buyer-friendly plan requires only a 10% down payment, with the remaining 90% payable upon handover or in installments. It eases entry into the market but might carry higher interest rates.

 

  • Post-Handover Payment Plans

These plans allow buyers to spread the remaining balance after handover over several years, reducing initial financial strain.

 

During Construction & On Handover Payment Plans

This refers to any plan where payments are divided between the construction phase and property handover. All the plans mentioned above except the 10/90 plan fall under this category.

 

1% Payment Plan

This unconventional option allows buyers to pay a mere 1% of the property value monthly until full ownership is achieved. While attractive for low upfront costs, it can take a very long time to complete ownership and may come with additional fees or limitations.

 

Rent-to-Own Payment Plans

These plans combine renting a property with an option to purchase it later. For such types of payment plans in Dubai, a portion of the rent goes towards the eventual down payment.

Sample Table of Payment Plans

Plan During Construction Upon Handover
60/40 60% (Installments) 40%
70/30 70% (Installments) 30%
40/60 40% (Installments) 60%
80/20 80% (Installments) 20%
50/50 50% 50%
10/90 10% 90% (One lump sum or installments)

Benefits for Buyers and Investors

  • Accessibility

A variety of plans cater to different financial situations, allowing more people to participate in the Dubai property market.

  • Flexibility

Buyers can choose a plan that aligns with their cash flow and risk tolerance.

  • Reduced Upfront Cost

Lower down payment options like the 10/90 plan or spread-out construction payments make entry into the market easier.

  • Potential Leverage

Off-plan payment plans with a lower initial investment can benefit from property value appreciation during construction.

  • Reduced Post-Handover Burden

Spreading the remaining balance over time with post-handover plans eases the financial strain after receiving the property.

The Dubai property market is dynamic. Interest rates, construction costs, and overall market trends could influence these payment plans. It’s crucial to stay updated, understand associated risks and potential fees, and seek professional advice before making any investment decisions.

By understanding these payment plans and working with experts like Rocky Real Estate, buyers and investors are better equipped to navigate the exciting yet complex Dubai property market in 2024 and the years to come.

Need to know more?

Payment plans is one of the more important things you should look into when buying a property. Finding the right payment plan that fits your needs, preference and budget will allow you to produce the highest return of your investment.

Now, if you want to explore various payment plans available today or perhaps buy apartment in Dubai, check out Rocky Real Estate. We have some of the best real estate experts who can help you find the best payment plans for you. We also have the necessary experience to guide you through the buying process of your property. Give us a call today!