One of the biggest investments in Dubai lately has been in the real estate market of the city. Today, Dubai is home to some of the most iconic housing projects globally, with builders like Sobha Realtors being one of the major players. Purchasing a home in Dubai is nothing short of a dream as it carries an array of benefits with it. However, the major element behind purchasing a new home in Dubai is to first understand property payment and plans and financial options, which is crucial for deciding which home to purchase. Having a clear knowledge of payment plans and how they work is essential for investors and buyers to be able to plan their budgets and avoid any unnecessary stress.
On the brighter side, the real estate market of Dubai provides flexible payment options, which provides a much simpler purchasing process. With the evolving dynamics in the real estate market of the city and more investment pouring in, there is a wide range of payment options today, which makes the process of purchasing a property a lot easier than ever before. Let’s delve deeper into understanding the payment plan options available for the investors/buyers.
50:50 Payment Plan
Being one of the most common payment plans in Dubai real estate, here, the price is split evenly between installments during the construction phase and completion payments made after the handover. The 50:50 Payment Plan helps in ensuring that adequate funds get transferred upfront to cover labor and material costs. Compared to any other payment plan, the 50:50 Payment plan provides a more balanced and middle-ground approach. This payment plan is instrumental in providing certainty of timeline and cost to both parties, with installments being distributed evenly during the pre and post-handover stages.
60/40 Payment Plan
Under this payment plan, the buyer pays 60% of the price during the construction phase. However, the buyer has the option of paying this amount in installments. The remaining balance is paid during the handover of the property. This payment plan provides a great, balanced distribution of bills during the development phase and handover. There is a roughly equal amount payable during every stage.
70/30 Payment Plan
This is one of the most common payment plans in the city. This allows for smaller upfront payments, and buyers can pay the remaining amount over time. This also happens to be one of the most favorable payment structures among the investors as it provides low barrier entry into the real estate market, and investors can purchase the property with only a third of the funds upfront. The rental proceeds can be used to cover subsequent installment payments on the outstanding purchase balance.
80/20 Payment Plan
This payment plan is one of the most utilized payment structures among developers, especially for off-plan or pre-construction property sales. Here, the buyer pays 80% of the purchase price in stages throughout the construction period. This provides substantial cash flow support to the developers for the building work to commence quickly. Upon the completion of construction and project handover, the remaining balance is paid by the buyer. Ideally, an 80:20 payment plan shifts a greater portion of financial obligations to the pre construction phase.
Now, let’s look at some of the payment plans for housing projects from Sobha Realtors.
| Sobha Reserve Villa | 60/40 Payment Plan | 7 Million AED |
| Sobha Florine Beach Residence | 70:30 Payment Plan | 1.21 Million AED |
| Sobha Coraline Beach Residence | 60:40 Payment Plan | 1.15 Million AED |
| Sobha Seahaven | 60:40 Payment Plan | 3.14 Million AED |
| Sobha Delphine Beach Residence | 60:40 Payment Plan | 1.1 Million AED |
Financing Options
Dubai’s Real estate market also provides diverse financing options for investors who are looking at short-term or long-term investment plans in real estate. Here is a list of some common loans used by investors both locally and internationally to invest in real estate.
- Conventional Mortgages – Traditional home loans for banks that are used for purchasing residential or investment properties.
- Home Loan for Non-residents – This a lucrative option for Expats in particular which allows them to invest in the real estate market through mortgages which are tailored for non residents.
- Commercial Property Loans – This has been designed for investors who like to purchase non-residential properties like commercial or retail properties.
- Developer Financing – Some developers provide in house financing for off plan or under-construction properties which are more flexible than bank loans.
- Private Loans – Private lenders can provide flexible, short-term loans, which is normally priced at higher interest rates.
Conclusion
With an array of impressive and easy payment plan options, Dubai effortlessly attracts investors looking to invest in the residential real estate market. While, for the most part, the most feasible alternative depends on the budget and goals of the investor/buyer, it becomes vital to explore all the remaining options as well.