Which Payment Plan Is the Most Profitable

Standard Vs. Post-handover Payment Plans in Dubai

Developers in the UAE offer flexible payment plans with 0% interest and a down payment of 5–20%, which directly affect Return on Investment (ROI).

Standard Payment Plan

It is paid during construction, with the last tranche made upon completion or handover.

Example:

60% – During Construction

40% – On Handover

This is a 60/40 payment plan. Options include 50/50, 70/30, 80/20, etc.

Emaar has a standard payment plan: 90/10. Developers such as Reportage Properties, which aren't so well-known, offer 20/80 schemes. 

The higher the last tranche, the more profitable the scheme is for resale at the final stage of construction. However, the higher the risk of default. This last payment can be made into a mortgage.

Post-handover Payment Plan (PHPP) 

It is extended for 2–3 years after completion or handover.

Example:

60% – During Construction

40% – Within 3 Years Post-handover 

Options include 75/25, 70/30, 65/35, etc. In same cases plans include payments on handover. Usually the PHPP is no more than 30%–40% of the property's price. 

Some developers such as Samana Developers provide 1% monthly payment options.

Why PHPPs are profitable 

Example: a 105m² apartment with 1 bedroom in Kempinski Marina Residences worth $600,000. Payment plan:

55% – During Construction

10% – On Handover

35% – Within 30 Months Post-handover

After completion, you can find tenants and pay off the installments with the rental income.

In 2024, the average yearly rent in Dubai Marina for a 1-bedroom apartment is $30,000. Assuming the rent will rise to $37,000 (7% per year) on handover in 2027.

If you have a standard payment plan, you pay out the entire sum on handover.

ROI = $37,000/ $600,000 x 100% = 6.2%

With PHPP, you paid out only 65% of the sum.

ROI = $37,000 / ($600,000 x 65%) x 100% = 9.5%

In Dubai, the apartment value will rise. If you decide to resell the unit, you will gain profit from capital appreciation without even paying out the whole investment sum.