Post-handover payment plans in Dubai: benefits and limits

Many developers offer so-called "post-handover" payment plans: a significant share of the price is paid after the keys are handed over, sometimes over several years. This scheme attracts investors, but it requires careful analysis.

How it works

The price is spread over three periods: at booking, during construction, and after handover. A "60/40" plan, for example, provides for 60% of the price before the keys are handed over and 40% afterwards, in regular instalments.

The advantages

• Cash flow effort spread out over time.
• The possibility of renting out the property while paying the remaining instalments, which can help fund part of them.
• Exposure to a higher-value property with a moderate initial outlay.

The limits

• Future instalments remain a firm commitment: they apply even if rent falls short of projections.
• The advertised price sometimes includes the cost of financing, which can translate into a higher price per square metre than a cash payment.
• Reselling before the end of the plan is subject to the developer's conditions.
• Service charges are added to the instalments from the moment the keys are handed over.

What to check

• The exact schedule of instalments and penalties in case of delay.
• Whether the plan is set out in the sale contract or is a temporary commercial offer.
• The equivalent cash price, to measure the real cost of the implicit financing.
• The possibility of paying ahead of schedule.

Who is it for?

An investor with visibility on their future income and looking to optimise their initial outlay may find this worthwhile. Anyone who cannot absorb a drop in rent or a vacancy period should be cautious.

Doing the full calculation

Comparing two offers means putting the price, instalments, charges and expected rent side by side, rather than relying solely on the initial down-payment percentage.

To review your project and check the conditions currently in force, book an appointment with Arzouni Properties.