Buying property in UAE from a property developer is becoming more affordable due to the flexible payment plans offered by property developers. Let's take a look at the main options.
Standard instalments
Here payments are made during construction and the last instalment is made on completion or on receipt of the keys. Example: 60 per cent is paid during construction and 40 per cent on receipt of keys. Schemes such as 60/40, 50/50, 70/30, 80/20 and others offer variety in plans.
Developer Emaar often offers a 90/10 scheme, while lesser known companies such as Reportage Properties may offer a 20/80 plan. The higher the last instalment, the more favourable the scheme is for resale in the later stages of construction, although the risks of default are higher. In such cases, the last instalment can be arranged as a mortgage.
Postpayment
This option involves extending payments for 2-3 years after construction is completed or the keys are received. Example: 60% during construction and 40% for 3 years after getting the keys. There can be different options such as 75/25, 70/30, 65/35, but usually the postpayment does not exceed 30-40% of the value of the property.
Some developers, such as Samana Developers, allow you to pay 1% per month, offering a total instalment term of up to 8.5 years.
An example of the benefits of a post instalment plan
Consider a 1-bedroom, 105 square metre flat at Kempinski Marina Residences at a cost of $600,000. Payment plan:
55% during construction 10% on receipt of keys 35% within 30 months of receipt of keys
When renting out the flat, you can cover part of the instalments with rental income. The average annual rent for a flat in Dubai Marina is $30,000 and with annual rent growth of 7%, it will reach $37,000 by 2027.
With a standard payment plan, the ROI will be 6.2%, whereas with a post-rental plan the ROI rises to 9.5% as the investor only invests 65% of the flat's value.
Property values in Dubai continue to rise and flexible payment plans allow investors to earn capital gains without paying the entire amount at once. Choosing the right payment plan depends on the investor's financial capacity and goals.
