Given that property acquisition is a high-risk/high-reward game, it becomes extremely important for investors to do their due diligence before putting their hard earned money into that dream holiday villa. This is especially true in the case of developments that are at the off-plan stage.
Going off the plan to get that coveted Holiday Villa in Dubai The recent economic downturn and the subsequent repercussions on the Dubai realty market led to severe heartburn among developers and investors alike. Prior to this, there were plenty of risk-takers willing to invest in properties that were only at the concept table. But it often takes a crisis to separate the true bravehearts from the general risk-takers. Lured by the charm of an off-plan property, there were many that later went on to singe themselves terribly when the market went into a downward spiral. Off-Plan properties by their very nature are a high risk/high reward proposition. For a partial investment, investors stand to gain from appreciation advantages that far outstrip most other investment options. All this is good when its smooth runnings in the market, however, it becomes tough to excite investors when the market is sluggish and demand is slowing down. Investing in off-plan properties is not for those looking to make speculative investments. It is a well-calculated, long term strategy. Developers are known to favor such investors and repose their faith by showering them with extra amenities, facilities, concessions and discounts. Combining the inherent gains in capital investment with these financial incentives is what gives off-plan investments their lucrative edge. Given that this is a high-risk/high-reward game, it becomes extremely important for investors to do their due diligence before putting their hard earned money into that dream holiday villa, that’s still at the off-plan stage and may turn out to be a delinquent investment: One of the first things that greenhorn investors must keep in mind is that off-plan properties are long term investments. So if you are expecting some instant gratification, you are better off spending that money elsewhere. The realty slowdown has gone on to affect nearly every developer irrespective of whether they are big or small in terms of revenues and market capitalization. However, it does appear beneficial to do the necessary due diligence behind each investment. Reputation, past records of completed projects, adherence to quality of construction and delivery timelines are but some of the aspects that one can evaluate a potential developer candidate. Many-a-times, it may so happen that one may reside at a place that is far away from the site location. In such cases, it becomes difficult to keep track of developments and verify what is being conveyed in the official communication from the developer. This is why, one must make arrangements for regular self-visits or appoint someone who can report in on their behalf. The Real Estate Regulatory Agency (RERA) would be a good place to track project updates as they are submitted in by developers. Lastly, the proliferation and expansion of the Dubai Metro may have opened up new avenues for investors. But, always remember that one must be careful when considering an off-plan property that is located at quite a distance from the city centre. Chances are that developments closer to the city centre stand a better chance of being completed on time, than those that are located further away. If one plays their risks out judiciously, they stand a great chance at acquiring that coveted Dubai property for a rate that’s significantly attractive than its market value if one were to purchase it upon completion.
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