Post Handover Payment Plan in Dubai: A Complete Guide for Buyers

What Is A Post-Handover Payment Plan?

So, what is a post-handover payment plan? A post-handover payment plan in Dubai is a method of purchasing an off-plan property that is being offered by an increasing number of real estate developers.

Before considering what a post-handover payment plan is, there are two factors to be aware of with off-plan property purchases:

• There is a point at which construction is completed and the buyer is given the keys to their new property. This is called the handover.

• Off-plan property purchases are usually paid for using a payment plan offered by the developer, where the purchase price is split into installments at set dates.

A post-handover payment plan in Dubai means that some or all of the payments made by the buyer of a property to the developer are made after the handover date.

Post-handover payment plans will vary in terms of their exact structure, but it could look something like this:

How A Post-Handover Payment Plan Works In Dubai

When understanding the meaning of post-handover payment plans, there are three key variable factors to be aware of.

Benefits Of Post-Handover Payment Plans

Here are some benefits of a post-handover payment plan in Dubai:

Budgeting

Many people choose projects with this payment plan as it helps them plan, set, and manage their budget more flexibly than when buying with a traditional property payment plan.

The meaning of a post-handover payment plan ultimately means uniform payments over a long period, making it very convenient for buyers and investors.

Flexibility

While traditional payment plans involve splitting the cost of the property over the construction period, which normally spans two to three years, a post-handover payment plan allows buyers to pay for the property over a longer period, which could be up to 10 years in total. This gives buyers much greater flexibility.

Affordability

A buyer wishing to buy an off-plan property may find they cannot afford the payments with a traditional payment plan. Because a post-handover payment plan splits payments over a longer time frame, each instalment will be lower. This can make post-handover plans a more affordable option that better suits the buyer's cash flow and financial position, particularly if they are a first home buyer.

Value for Money

Payment plans for off-plan properties can be fantastic value for money because they are interest-free, and off-plan projects are generally priced lower than completed projects. This is great for investors and buyers who want to own property in Dubai and benefit from long-term capital appreciation.

Using Rental Income to Make Installments

Once a property is handed over, the buyer can rent it out to earn a rental income. With a post-handover payment plan, these rental payments could be used to make the post-handover instalments rather than the buyer needing to use their existing savings. However, the buyer should have a backup plan just in case they face any delays or issues with finding a tenant for their property.

Drawbacks Of Post-Handover Payment Plans

Understanding the potential drawbacks of a post-handover payment plan will help you make a more informed decision. The drawbacks of this payment plan could be:

Handover Delays 

This is one of the most significant risks associated with off-plan projects. There may be delays from the stipulated handover date, and this could occur for a variety of reasons, from financial constraints on the developer’s end to unexpected construction delays.

Whilst delays are often short, these may disturb your fixed post-handover payment plans in Dubai. However, the Dubai authorities have robust laws and regulations for such instances, and you can seek legal help if needed.

Different Results

While this is a very rare possibility, it is still worth mentioning among the risks. Sometimes, the completed project of your off-plan property may differ slightly from your initial expectations.

If the finished property does not meet your expectations, you may be in a tough spot as you have already begun the post-handover payment plan. However, this a risk all investors deal with. You can also minimize the risk by associating with reputed developers in Dubai. You should also ensure that you complete a snag list before accepting handover of your property to ensure any construction issues or defects are resolved.

Market Fluctuations 

Fluctuating market prices may affect your post-handover payment plan, particularly if you plan to use rental income to make the post-handover instalments. The current market trends in Dubai are for rising sales and rental prices, a very favourable situation for investors. However, this could change, and all investors should do careful research and speak to a real estate expert before making an investment decision.

Is A Post-Handover Payment Plan Right For You?

Having understood what is a post-handover payment plan, you can now figure out whether it is the right payment option for you. Keep these factors in mind while deciding so:

• Can you afford to pay for a property upfront or using a traditional payment plan? Along with the additional costs of buying a property.

• Do you prefer a completed project or an off-plan property? 

• Is a flexible payment plan the correct option for your budget and finances? 

• Are you familiar with the risks of an off-plan property and willing to deal with them? 

Which Developers Offer A Post-Handover Payment Plan?

When it comes to post-handover payment plans, another important factor to be aware of is that not all projects will offer this payment method.

Some developers favour traditional payment plans, where all payments are made during construction and upon handover.

However, some recent examples of developers offering post-handover payment plans have included:

• Golf Place II by Emaar Properties

• Arabian Ranches 3 by Emaar Properties

• Sobha Hartland Greens by Sobha Realty

• La Rosa at Villanova by Dubai Properties

• Bayz 102 by Danube Properties

How To Find Properties With Post-Handover Payment Plans In Dubai

While finding and choosing a property with a post-handover payment plan in Dubai may seem daunting, working with a RERA-affiliated real estate agent will simplify the process. An experienced broker will be able to offer you a complete picture of the market, and take the time to understand your situation and requirements before suggesting the perfect projects with post-handover payment plans for you.

If you require any assistance or information about buying with a post-handover payment plan or finding the perfect property, Engel & Völkers is here to help.