Property Installments In Dubai, United Arab Emirates

The Dubai real estate market has advanced significantly in recent years. UAE attracts investors from around the world with its high return on investment and highly favorable living circumstances. The skyscraping marvels ensconced within the emirate, some of which are completed and others of which are in the process of being constructed, plainly demonstrate this.

When purchasing a home in Dubai, it is tough for the majority of purchasers to make a full down payment. This is why the habit of purchasing real estate in installments is so prevalent. For the purchasers' simplicity and convenience, real estate developers provide a complete payment plan. When purchasing a home in Dubai, a payment plan defines the number of instalments to be paid over a specified time period as well as the cost of each instalment.

It should be mentioned that different real estate developers provide various payment arrangements. This page provides an overview of the most frequent payment schemes in Dubai

Some of the Most Common Payment Plans for Purchasing a Home in Dubai

Post-Handover Payment Plans

Post-handover payment, as its name implies, permits the buyer to make the payment after the Dubai property has been transferred to them. However, they are still obliged to pay a portion of the property's entire price before they can claim ownership.

Introduced at the end of 2013, post-transfer payment options were predominantly available for larger developments. However, the success of this payment model inspired private developers to adopt it as well.

This type of payment arrangement is typically designed for investors seeking Dubai real estate. It provides them with significant convenience, since they may assume responsibility for the property and rent it out after receiving it. They utilize the rental income to cover the remaining balance. The fact that ROI in Dubai is quite high, as are rental yields, has contributed to the success of this payment plan. End-users (buyers) also favor this payment plan because it allows them to move into the purchased property and manage the remainder of the payment with ease.

10/90 Payments

It is an alternative, more aggressive type of post-transfer payment arrangement. Dubai developers typically offer this for off-plan properties. As the name suggests, 10% of the property's total worth in Dubai must be paid up front, with the other 90% paid in installments.

This is a relatively new payment option that is favored by both purchasers and investors. It provides customers with a secure and quick method for purchasing a property in Dubai or adding additional listings, respectively. Those with limited funds might choose developments with such payment arrangements and reserve a property in their name.

Installment payments till delivery

The most common payment schedules consist of percentages paid at various periods of the duration till handover. If you have a 60:40 payment plan, for instance, you will pay 60% in installments until handover and the remaining 40% upon handover.

Typical ratios for this type of payment plan include 10:90, 20:80, 40:60, 50:50, 60:40, 70:30, 25:75, etc. These ratios vary from developer to developer and are not fixed.

Rental-to-Own Payments

It is a prevalent method of payment in many nations. The rent-to-own payment plan is designed for end-users and is only offered for move-in ready properties. It is more ideal for purchasers who lack the financial capacity to make a down payment on the Dubai property.

According to this method, a tenancy agreement for X years is signed by the landlord and renter. This payment plan includes a higher annual rent than the market rate. According to the rules of this agreement, the tenant will become the buyer of the property in Dubai if both parties fulfill their obligations.

This strategy permits the tenant to use rent as a down payment on the property. They can obtain a mortgage for the remaining amount through banks or private lenders.

Final Reflections

Considering the high property costs in Dubai, the aforementioned payment methods greatly benefit investors and purchasers. Despite being created by the same developer, not every Dubai project or property has the same payment structure. Before selecting one of the numerous Dubai properties offered by The Pearl Gates Real Estate Broker, conduct research and make an informed decision.

Other insights that may interest you