For any ex-pat with a valid United Arab Emirates identity card, the process of purchasing property is relatively simple compared to other countries. Additionally, the UAE market is brimming with property offers to satisfy any demand — from luxury apartments with views of the Dubai Canal to affordable home units, you name it.
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And while Dubai’s real estate prices have been increasing a bit slower in 2023, it still looks like there is no better time to snap up residential properties. But how do you make the most of the situation? Here are some helpful property investment tips for you.
1. Answer Crucial Questions to Set Your Property Goals
Before you embark on browsing the market and viewing real estate, it’s essential to understand what goals you pursue.
First, decide on the investment strategy you are going to adopt — buy-to-let or buy-to-sell. When you take a buy-to-let approach, you purchase property to rent it out to tenants and get monthly income from the rental payments. In the case of the buy-to-sell strategy, you purchase the property to resell it for a profit.
Second, you should make it clear whether it’s residential or commercial real estate you want to get into. Both types of properties can bring high returns on investment, but you should carefully study the regulations for landlords for each model to make sure you are ready to bear the responsibility you’re embracing.
Third, estimate the risks associated with property investment in Dubai. Eventually, you will deal with some challenges on your way to gaining solid rental yields, so it’s better to be prepared for them. For instance, an unreliable tenant may delay rent payments or won’t pay at all. The property may get damaged, and you will need to repair it. Additionally, property prices can fluctuate, impacting your revenue.
Finally, settle upon the property type for your investment: new build, off-plan, or refurbished. New builds are cheaper to run because they comply with the latest standards, but they are pricier. Off-plan real estate is usually discounted, and its value can grow dramatically from the point of purchase till you market it. Refurbished properties or older homes can also be a good option for consideration.
2. Find Out More About the Location of Your Future Property
The location of the UAE property is going to have a huge impact on what tenants you attract and what profit you gain from your investment. So, before you purchase real estate, consider the following:
- Desirability of the property for tenants in the area.
- Rental price growth in the area.
- Rental yields in the chosen location.
- Tourist flow and destinations.
- Infrastructure.
Across the United Arab Emirates, Dubai and Abu Dhabi are the most attractive cities for real estate investors. All thanks to high rental yields, convenient infrastructure, and popularity among tourists.
3. Plan Your Budget Carefully Before Investing
That’s where many beginners fail. They do not consider any costs associated with real estate investment other than the property price. They learn the hard way that they have to deal with other expenditures as well.
So, what additional costs do you have to budget to achieve a strong ROI?
- Taxes. You will be subject to paying taxes when you invest in real estate, namely stamp duty, income, and capital gains taxes.
- Insurance and mortgage. As a landlord, you will need to take out appropriate insurance. If you use a mortgage, you’ve got to plan a budget for monthly payments.
- Inspections and valuations. Before you buy a property, you may want to carry out building inspections or valuations to make sure you make the right investment and the property follows all standards.
- Legal services. You may need to hire a solicitor to handle the legal aspects of the deal.
- Property management. As you grow your investment portfolio, you may want to hire a property management company to deal with arranging repairs and maintenance.
Taking these costs into account in your budget will help you manage your finances more efficiently.
4. Monitor the Real Estate Market at Least Once a Year
Keep tabs on what is going on in the real estate market in the UAE for effective decision-making.
The property market is fluctuating, so monitoring will help you spot the most advantageous opportunities for investment. Additionally, it’s always good to know what your competitors present, so you could improve your offer and increase property value.
Besides, some changes in the real estate market are affected by external sources like the COVID-19 pandemic, the cost of living shifts, the geopolitical crisis in other countries, and more.
As a busy investor, you may be pressed for time and find excuses for skipping market monitoring. Luckily, apps like Dubai Real Estate UAE and Bayut Dubai Property Search can keep you updated on the latest developments in the real estate market.
5. Contact Proven Experts in the Property Market
If you want to initiate the real estate investment process in the UAE for the first time, you must have the right people by your side to guide you through this journey. They will help you carry out safe transactions and share tips on how to buy your dream property and achieve high ROI. Metropolitan Real Estate is one of the trusted partners for buying, selling, or renting real estate in Dubai, Abu Dhabi, and Vienna. The company’s specialists have built an impressive real estate portfolio, and they will gladly assist you when you decide to build wealth and generate income from your property investment in the UAE.
Conclusion
With favorable tax conditions, high rental yields, and a promising future for the demand for real estate in the United Arab Emirates, investing in property in this country is a wise decision. Follow these simple tips to secure your real estate investment and achieve a strong return on investment.