Glossary / Property

Payment plan

A payment plan is the schedule of instalments by which an off-plan property is paid for, and because money paid later is worth less than money paid today, two plans at the same headline price are not the same price.

Front loaded plans demand most of the money during construction. Post handover plans spread instalments over years after you have the keys and can be earning rent.

The difference between them, discounted properly, is commonly eight to fifteen percent of the headline figure.

Where people get it wrong

Accepting that a plan is a discount without discounting it. The advantage is real but it has a size, and the size depends on your own cost of money.

The framework behind it Off-plan payment plans and their real cost sets out the rule, the arithmetic and where it breaks.

Read the framework

Related terms

Off-plan Off-plan means buying a property before it is built, paying in instalments against construction milestones and taking ownership only at handover, which in Dubai is registered through Oqood rather than an immediate title deed. Internal rate of return The internal rate of return is the single annual rate at which a series of dated cash flows has a present value of zero, which makes it the only fair way to compare investments whose money moves in and out at different times. Handover Handover is the point at which a completed off-plan unit is delivered to its buyer, the final payment falls due, the title deed is issued and the service charge begins.

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