What is post handover payment plan?
Before going into what a post handover payment plan is, there are two things you need to keep in mind when buying off-plan property:
When the building is done and the buyer receives their keys to the new place, the process is through. This is called handover.
Off-plan property purchases are usually done through a payment plan offered by the developer, where the purchase amount is divided into installments at certain times.
A Post handover payment plan in Dubai refers to some or all of the payments made by the buyer of a property
Post handover payment plan t plans are strategic financial solutions provided by property developers to help buyers navigate the real estate purchasing process. Such Dubai off-plan payments based on completion enable property investors in Dubai and other emirates to make payments in pre- and post-handover instalments.
Most Post handover payment plan schemes require investors to make a 20% down payment to reserve a property. In a 40/60 payment plan, which is rather common, buyers must pay 40% of the entire amount, including a down payment, before handover. The remaining 60% payment is made throughout the construction phase after handover. It is a very common payment plan in Dubai and in all the Emirates.
Here is few examples of a Post handover payment plan
- 10% on purchase date
- 10% 2nd installment
- 5% 3rd installment
- 10% at 20% construction completion
- 5% at 50% construction completion
- 10% at 80% construction completion
- 10% at 100% completion and handover
- 10% 6 months post-handover
- 10% 12 months post-handover
- 10% 18 months post-handover
- 10% 24 months post-handover
Advantages Of Post Handover Payment Plans
Here are the advantages of a Post handover payment plan in Dubai:
- Budgeting
Many people prefer projects with this payment plan because it enables them to plan, set, and manage their budget better than when buying a typical property payment plan.
A post-handover payment plan involves equal payments over a long period of time, which is very convenient for buyers and investors.
- Flexibility
While a regular payment plan distributes the cost of the property over the construction period, which usually spans two to three years, a Post handover payment plan allows customers to pay for the home over a longer time, possibly up to ten years in total. This gives the buyers much more flexibility.
- Affordability
A buyer looking to buy an off-plan property may realize that they cannot afford the payments under a traditional payment plan. A post-handover payment plan splits payments over a longer period of time, leading to lower installments. Post-handover plans might be more cost-effective for first-time homebuyers.
- Value for money.
Off-plan properties can sometimes provide very good value-for-money payments because they are interest-free and often less expensive off the plan than completed units. That is a golden combination for investors and buyers aiming to have property in Dubai combined with long-term capital appreciation.
- Using Rental Income for Installments
Once a property is handed over, the buyer might rent it out to generate money. With a Post handover payment plan, these rental payments might be used to pay the post-handover installments rather than the buyer having to spend their own savings. However, the buyer should have a backup plan in case there are any delays or difficulties in finding a tenant for their property.
Disadvantages of Post Handover Payment Plans
Despite the advantages of the Post handover payment plan, there are disadvantages. Some of these are as follows:
- Higher total cost:
The buyers who select a Post handover payment plan may pay more for the property at the end. This is because developers tend to charge more for the properties that have a Post handover payment plan
- Longer payment period:
A Post handover payment plan often stretches the period of payment for several years. It implies that the buyers will pay for their house over a longer length of time, which may not be convenient for all.
- Risk of delayed payment:
There is a danger that the buyers will miss or delay their installment payments, which could result in fines.
After you’ve come to understand what a Post handover payment plan is, you can decide if that is the best payment option suited for you. Remember these aspects as you make your selection
- Is a Post handover payment plan Suitable for You?
- Can you pay for a house either partially or in full over a period of time? Buying a home involves more costs
- Do you prefer complete or off-plan properties?
- Is a flexible payment plan perfect for your budget and finances? Do you know and are prepared to take on the risks of an off-plan property?
How Do Developers Design Post handover payment plan in Dubai?
Dubai developers design different payment plans to cater for the diverse needs and wishes of its customers.
These programs often require the initial downpayment at time of property transfer, followed by installment payments spread over a longer period of time.
It may vary depending on the developer and project, downpayment amount, installment schedule, and the length of a payment period.
Some developers could offer fixed rate plans with fixed monthly installment amounts, while others might offer flexible plans with payments that vary based on market conditions or status of the project.
Conclusion
Post handover payment plans transform the way people relate to real estate ownership. Flexibility, affordability, and immediate possession make this a plan catering to every kind of buyer and investor. Whether one is aiming to secure his or her first home, expand an investment portfolio, or achieve the dream of owning an expensive property, a Post handover payment plans seems to be a perfect deal.
In case you have a Post handover payment plan, be sure to research the developers, get to know the terms, and match your financial goals with the payment plan. Unlock the door to your dream property and manage your finances well.
Do you want to find out more? Get in touch with us today and know what’s available in your region about the Post handover payment plan?
FAQ (Frequently Asked Questions)
Post-handover payment plans are a flexible way for buyers in Dubai to pay for their homes. They let buyers pay a portion of the cost of the home while it is being built and the rest over several years after the property is handed over.
Post-handover payment plans can last anywhere from 2 to 7 years, but it depends on the developer and the project. In some high-end projects, you may even have up to 10 years to pay.
These plans are great for people who want to buy a house for the first time, invest, or live in it themselves but don’t want to pay the full price all at once. It helps you keep track of your money while still letting you enjoy owning property.
There are times when properties with post-handover plans may have slightly higher prices per square foot than deals paid in cash or up front. The benefit, on the other hand, is the longer payment terms and lighter financial load.
Most of the time, mortgage financing is different from post-handover plans offered by the developer. When buyers get a mortgage, they usually pay the bank, but when they hand over the keys, they pay the developer directly.
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