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4 Types of Payment Plans for Buying a Property in Dubai

The real estate sector in Dubai has certainly progressed a lot in recent years. Attracting investors from across the globe, UAE promises high ROI and extremely favourable living conditions. The sky-touching marvels nestled within the emirate, some fully developed while others on the route to completion, clearly testify this fact.

It is difficult for most people to make a 100% upfront payment when buying a property in Dubai. This is why the trend of buying properties in instalment is widely followed. Property developers offer their buyers a comprehensive payment plan for their ease and convenience. Basically, a payment plan specifies the number of instalments to be paid in a fixed time period as well as the amount to be paid in each instalment when buying a property in Dubai.

It is to be noted that different property developers offer different types of payment plans. In this article, we have shed light on different types of payment plans most commonly offered in Dubai:

4 Most Common Payment Plans for Buying a Property in Dubai
1. Post-Handover Payment Plans

Post-handover payment, as the name suggests, allows the buyer to make the payment after the property in Dubai is handed over to them. However, they are still required to pay a certain percentage of the total price before they can own the said property.

Introduced in late 2013, post-handover payment plans were mostly offered for larger developments. But, the popularity of this payment plan led to private developers jumping on the bandwagon as well.

This type of payment plan is usually targeted towards investors looking for Dubai properties. It offers great convenience to them as they can take charge of the property and rent it out post-handover. They use the rental yield to pay the remaining amount. The fact that ROI in Dubai is on the higher side and so are the rental yields has contributed to making this payment plan a success. End-users (buyers), too, favour this payment plan since it allows them to settle in the property they have purchased and manage the rest of the payment conveniently.

2. 10/90 Payments

It can be termed as another, more aggressive, form of post-handover payment plan. Developers tend to offer this for off-plan properties in Dubai. As the name suggests, 10% of the total value of the property in Dubai is to be deposited initially, while the rest of the 90% is paid in instalments.

This is a rather new payment plan favoured equally by buyers and investors. It offers them a safe and convenient way of buying a property in Dubai or adding more listings in their inventory, respectively. Those who are short on cash can opt for developments that come with such payment plans and reserve a property under their name.

3. Payment in Installments until Handover

The most regular payment plans are divided into percentages paid at different stages of the duration until handover. For example, if you have a 60:40 payment plan, you will be paying 60% in instalments until handover and the rest 40% on handover of the property. 

This kind of payment plan can often be seen in the following ratios: 10:90, 20:80, 40:60, 50:50, 60:40, 70:30, 25:75, etc. These are not fixed ratios and vary from developer to developer.

4. Rent to Own Payments

It is a very popular mode of payment in many countries. The rent-to-own payment plan is targeted towards end-users and is available for ready to move in properties only. It is more suitable for buyers who do not have sufficient monetary resources to make an upfront payment of the property in Dubai.

As per this plan, a tenancy contract for the duration of X years is signed between the landlord and tenant. The annual rent in this payment plan is higher as compared to the market price. According to this agreement, the tenant will become the buyer of the said property in Dubai if the terms of the contract are successfully met by both parties.

This method allows the tenant to utilise the rent money as the down payment of the property. For the remaining amount, they can get a mortgage through banks or private lenders.

Final Thoughts

Taking into account high Dubai property prices, the aforementioned payment plans truly work in favour of investors and buyers. However, it is important to note that not every project or property in Dubai comes with the same payment plan, even if it is developed by the same developer. So, do your research before you choose the one from abundant Dubai properties available at Provident Estate and then make an informed decision.

Palak Bhattacharya

Palak Bhattacharya

Digital Content Strategist

    What are Different Types of Payment Plans for Buying a Property in Dubai?
    Article Name
    What are Different Types of Payment Plans for Buying a Property in Dubai?
    Planning to buy property in Dubai? Take a look at the most commonly offered payment plans by top developers in the emirate for residential projects.
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    Provident Real Estate
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