How to choose the right developer
Buying real estate at the project stage (off-plan) is considered one of the most effective investment strategies. Compared to a finished property, you can save up to 30% of the total cost. However, in addition to the fact that you will have to wait a long time for construction to be completed, there is no guarantee that the developer will be able to complete the project. This is one of the main concerns for all investors. You can minimize risks by choosing the right developer.
Check their track record and reputation
The first selection criterion is to study the developer's completed projects over the past 5-10 years. It is important not only to consider the number of completed projects, but also the adherence to deadlines, the quality of construction, and compliance with what was promised in the marketing materials. Pay attention to the reviews of buyers of previous projects on the Internet, social networks, and specialized forums.
Reliable developers publish photo reports from construction sites, regularly provide updates on the progress of work, and provide access to properties for inspection. Avoid companies that hide information about their projects or have unfinished projects in their history. Pay particular attention to the reasons for delays in previous projects: were they due to objective factors (changes in legislation, force majeure) or management errors on the part of the company?
Financial stability and transparency
The financial condition of the developer is a critical factor. Request information about the sources of project financing: own funds, bank loans, funds from equity investors. Reputable developers work with well-known partner banks and can provide documents confirming that the project is secured with financing.
Licenses and permits
Delays in obtaining permits are a common reason for construction delays. Requirements vary from jurisdiction to jurisdiction, but a construction license, building permit, and approval from local authorities are mandatory.
Contract terms and buyer protection
Carefully review the purchase agreement, especially the sections on construction deadlines, penalties for delays, and refund terms. Reliable developers offer transparent terms with clear mechanisms to protect buyers' interests.
Practice shows that the most reliable conditions for investors are created where government regulation is in place. A striking example is the Dubai market. It has a unique RERA system that protects buyers at all stages of the transaction. Estate Invest has extensive experience in the real estate overseas market, and it is in Dubai that the strategy of controlling developers demonstrates maximum effectiveness.
All buyer payments are deposited into separate escrow accounts for each project, and the developer can only withdraw funds in stages, after receiving permission from the regulator. The results are impressive: 98.3% of all off-plan projects in Dubai are completed successfully. Of the remaining 1.7%, most projects are transferred to other developers, and less than 0.1% result in a full refund to investors. This level of protection makes real estate investments much more predictable compared to markets where there is no systematic government regulation.
