Petro dollars are not the only source of income in the UAE – many residents and non-residents have chosen to invest in property since freehold property was established for non-UAE nationals in specific areas of Dubai in 2002.
Property buying processes are relatively simple for foreigners in comparison to other economies, making Dubai an attractive prospect for buyers, and recently, regulation has begun to improve dramatically opening the market up to the more cautious ex-pat investor.
Dubai rents rose rapidly in 2013 meaning owning property in the city has once again become a lucrative prospect. The possibility of making large profits from renting out or reselling property in Dubai is very attractive to many, but equally, conventional buyers and investors who simply want to see a regular, solid return are also a substantial part of the market. Zero income tax, convenient location, modern infrastructure, negligible crime rate and cosmopolitan environment are among the many contributing factors to Dubai’s most recent property boom.
Whether you are local or a foreign buyer, it is necessary to consider a few key points before buying investment property in Dubai.
Reason behind your property purchase
Before you start viewing properties, identify the reason for buying Dubai property. You need to be sure whether you want an investment or a place to live, as this can significantly influence the type of property you would consider buying. If you are going to rent out the property, a one or two bedroom apartment is a much better idea than a luxury villa as far less upkeep and maintenance will be required.
Choose the best time to buy
The best time to buy an investment property is when mortgage interest rates are low, and when there is an oversupply, as this will allow buyers to negotiate on prices, so keep your eye on market conditions and prices.
Location, location, location
Don’t compromise on location. Investors should concentrate on areas with high rents and high demand. Spend some time in the neighbourhood to make sure you are happy with your property.
Consult an authorised agent
Do your research to find a reputable developer, or, if you are buying in the secondary market, use an established RERA-registered real estate agent like Betterhomes. This will be invaluable to you, because you will benefit from years of market experience. If you are buying off plan direct from a developer, be very clear that you will want comprehensive project details before you purchase. You will also need a lawyer to facilitate the process of buying.
Organise your finances early
Increased regulation means you will need to have your finances organised in advance. Knowing what you can pay or afford to borrow will increase your confidence and help you move quickly when you find a property you like. If you are a new investor, be sure you can cover your mortgage payments for the first six months because it may take time to find a tenant you like.
If in doubt, ask a professional investor or a friend or family member who has experience of the market. You will sleep better at night in the run up to closing your deal if you have resolved concerns before signing on the dotted line. This will also help you avoid property scams or breaches of contract.
Your success in investing in commercial or residential property will depend on your ability to understand the market, so do your research and listen to advice.
Visit www.bhomes.com to start investing in Dubai property.