Dubai property-off-plan-vs-ready

Off-Plan vs. Ready Property: The Pros and Cons

When you’re looking to buy property, you’ll come across both off-plan and ready-to-buy properties. So, as a property buyer, what decision should you take? In this blog, we’ll explore the pros and cons of both off-plan and ready-to-buy properties, to empower you in making an informed decision. First, let’s examine the trends and statistics from the Dubai Land Department (DLD) regarding the buying and selling of off-plan and ready-to-buy properties.

According to the statistics from the DLD, as of the 3rd quarter of 2023, the buying of off-plan properties from real estate development companies accounted for 65% of the total real estate transactions. First, let’s delve deeper into the differences between off-plan and ready properties. 

Off-plan vs Ready Properties – The Differences!

So, let’s answer the million dollar question. What are off-plan and ready properties? 

An off-plan property is a property that hasn’t been developed as of yet. It only exists as a piece of land with an approved architectural blueprint. Off-plan properties are comparatively cheaper than ready properties, as developers offer discounts and incentives like payment plans to encourage investment. 

On the other hand, ready properties are properties that exist as brick and mortar accommodations. Thus, when you’re buying a ready property, you know exactly what you’re getting yourself into. You have an already built structure, thus you don’t need to speculate what it will look like once it’s completed. But, these are only the surface level differences. Let’s explore in depth the pros and cons of buying either an off-plan, or a ready property. Let’s dive into it. 

The Pros of Buying off-plan Properties

Now that we know what are off-plan properties, let’s look at the pros of buying off-plan properties from real estate development companies. 

1. Cost savings and appreciation

One of the best advantages of buying an off-plan property is the ability to save costs and benefit from appreciation in the property’s value in the future. Why’s that? It’s because the properties only exist on paper, therefore, investors have to pay less than what they are paying for a ready property. Because of the developer’s marketing efforts in the future, the property’s value appreciates, allowing the investor to profit from their investment. Thus, off-plan properties are a great way for investors to make a quick capital gain from their investment.

2. Flexible payment plans

In order to incentivize investment, developers also provide flexible payment plans. Therefore, when you buy an off-plan property, you can pay via a yearly plan that is divided into monthly instalments. This makes payments more manageable for investors, as they do not have to pay a large sum of money all at once. Consequently, off-plan properties become a more appealing option for investors. 

3. Modern facilities

Off-plan properties are recently developed projects. As a result, they provide state of the art accommodation facilities, such as temperature controlled swimming pools, Hi-tech gyms, landscaped gardens, community centres, and much more. This is something you don’t typically find with ready properties because they are mostly homes that have already been constructed.

New off-plan properties also come with more advanced features, such as a business lounge, meditation area, a gazebo, and a barbecue area. Thus, whether you want to host a business meeting or plan a communal barbecue, it’s your world now.

So, these are the advantages of buying an off-plan property. However, there are also some disadvantages which you must take into account when planning your investment. Now, let’s discuss those. 

4. Secure Investments

New real estate projects require extensive financing for various reasons, such as buying raw material, paying regulatory fees, and acquiring land. In an off-plan property, there are chances that a developer runs out of cash, which results in inability to complete the project. This halt means that as an investor, you stand in deep water, whereby your investment is stuck, and rather than appreciating, the project depreciates in value. Thus, when investing in an off-plan property, cross check whether the developer has a history of defaulting or not.

However in Dubai, the risk for developer default is mitigated with the introduction of escrow accounts. In an escrow account, the buyer’s investment is protected by a 3rd party, known as an escrow agent. The escrow agent will withhold the payment from the buyer, unless all clauses mentioned in the sale deed have been fulfilled.

Also, the developer only receives payment for completion of one construction milestone at a time. Thus, the buyer doesn’t have to make payment for a milestone which hasn’t been achieved. The escrow measures ensure that developers adhere to their deadlines, and the buyer’s investment remains secure. 

The Cons of Buying An Off–Plan Property

The following are some of the considerations that you must look into when buying an off-plan property. 

1. Construction delays

One of the biggest risks involved in buying off-plan properties are the chances of delay in the construction. Construction delays occur either because of changes in legal regulations, prices of raw materials, or disputes between the developer and the authorities. These delays can prove detrimental, as they hamper the maturity of the project and also cause uncertainty among investors. This uncertainty contributes to plateaued or falling prices, which means that you might be looking at an impending failed investment.

2. Limited information about the finished product 

Perhaps another drawback of buying an off-plan property is the risk of not being able to contemplate the finished product. In the case of a ready property, you can schedule a visit through your real estate agent, allowing you to evaluate the property’s finish, build quality, and ambience to a great extent. However, this isn’t the case with off-plan properties unless construction gets under progress. Thus, you never know whether you’ll receive the product which meets your desired expectations.

Uptil now, we have looked at the ins and outs of off-plan properties. Now, let’s look at ready  properties in detail. 

The Pros of Buying Ready Properties 

The following are the Pros of Buying Ready Properties.

1. Immediate availability

One of the major advantages of buying ready properties is the fact that they are available for occupation the minute you close the deal. Thus, it’s a great opportunity for your family to move in immediately.

This is a great benefit. Because first, you don’t need to delay the sale of your existing property, or look for makeshift property to stay in. Moreover, if you’ve bought the property to be put on rent, you can start straight away, rather than waiting for the property to be completed. Thus, you can either move in, or start generating an income stream immediately. 

2. Ability to evaluate the finished product

Unlike off-plan properties, ready properties provide you with the opportunity to evaluate the current product. As a result, you have a clear idea about the quality of the exterior, and the raw materials used. The ability to assess these factors means that you can avoid future hazards, and make your decision wisely. 

3. Opportunities for negotiation

Off-plan properties are often new projects, which have a high demand, because of aggressive marketing efforts being done by the real estate development companies. On the contrary, ready properties are usually second hand properties, put up for sale from existing owners. Usually these properties have been up for sale for a long time. As a result, you can negotiate with the buyer, and secure a comparatively better deal.

So, these are the benefits of buying ready properties. However, like with everything, these also come with a few disadvantages. Let’s look at them. 

Disadvantages of Buying Ready Properties

The following are the disadvantages of buying ready properties. 

1. Limited options for customization

Ready-made properties cannot be altered in the same way as an off-plan property.  and there is limited room for customization. If you have specific design preferences or want to personalize your living space extensively, a pre-built home may not be the ideal choice. And, even if you think of some customization, you may have to start from search and demolish the existing structure, which contributes to an additional cost. 

2. Dealing with existing wear and tear

In what way existing properties may have been used by previous owners, leads to various different types of wear and tear. Thus as a buyer, you should be prepared for the possibility of repairs or renovations to address issues such as outdated features, structural problems, or cosmetic wear and tear. 

3. Obsolete systems and appliances

Old properties often come with systems and appliances that need repair and replacement, which contributes as an additional cost if you consider buying one. Thus, before making a decision, carefully evaluate the property in question.

Now that we know the ins and outs of both off-plan and ready properties, it’s time to conclude and recap what we learnt throughout this blog.  

Now, let’s recap the differences between off plan and ready properties   

Off-Plan Properties

Advantages Disadvantages
Cost savings and appreciation Construction Delays 
Flexible payment plans  Obsolete systems and appliances
Up-to-date accommodation facilities
Developer confidence

Ready Properties

Advantages  Disadvantages
Immdediate availability Limited options for customization 
Ability to evaluate the finished product Dealing with existing wear and tear
Opportunities for negotiation

 

The Takeaways

When buying a property, you have two options available. Either, you can buy an off-plan property from a real estate developer, or you can either buy an off-plan property from a real estate development company, or you can buy your home with the help of the best property management companies in Dubai.

Off plan properties tend to be relatively cheaper, provide options for further customization, and financing. However, they come with strings attached, such as limited information about the finished product, and construction delays.

On the other hand, ready properties are always available for purchase, provide a view of the finished product, and also provide considerable room for negotiation. But on the flipside, you’ll have to deal with: wear and tear, limited customization options, and deal with the repair and maintenance of appliances.

However, before making a decision about whether to buy an off-plan, or a ready property, evaluate further factors, such as market signals, available finances, your broker’s advice, and how urgently, you need a new accommodation solution.

Thus, before buying either an off-plan, or a ready property, evaluate the pros and cons of both options and then make your decision. Moreover, also check out the best freehold areas in Dubai if you really want to invest.

Download Brochure

    This will close in 0 seconds

    Download Floor Plan

      This will close in 0 seconds