3 Tips for Real Estate Investors in Dubai that Guarantees ROI
Like every other market in the world, Dubai’s property market also suffered a setback in 2020 due to the global pandemic. However after a brief sabbatical, it is back on track eyeing for a quick and strong recovery. This strong recovery is largely due to support from Expo 2020 and the return of foreign investors to Dubai due to the resumption of international flights. With the rise in real estate prices and demand, the interest of local and foreign real estate investors is also increasing. This has led to an influx of investors from different countries seeking investment opportunities in Dubai. However, this does not mean that every investment in the real estate sector guarantees beneficial results. To get high returns, you need to be clever, smart, and market savvy.
The following tips will help you make a profitable real estate investment in Dubai:
Identify your project
This one’s critically important. When you identify your budget, you actually analyze and decide your purchasing power. This will give you the maximum range you can target. It requires doing a lot of homework and research on the market so that you can find out what type of properties you can purchase in the given range. Property buyers and real estate investors in Dubai have the option to take home mortgage loans. This obviously has many benefits, but one can get carried away due to the ease of financing and may apply for a higher amount of loan than they can afford. This can lead to a troublesome situation in the long run. Having said that, it is important to note there are mortgage cap limits implemented by the Central Bank of UAE for expatriates.
Determine the purpose
Some people buy properties for reselling purposes, while some plan to rent them out to earn a passive stream of income. The criteria for property selection are different in both cases. For example, if you aim to resell it later on, you can choose from off plan properties in Dubai as they are available at comparatively lower rates. However, the drawback here is that you will have to wait for the development to be completed before you could earn ROI on it. In the case you are buying property to rent it out, there’s a lot to consider. The property must be in an area suitable for the resident. This means that you need to have good connectivity, easy access, and basic and advanced equipment for residents. It is important to determine the purpose of the investment in advance so that the property list can be sorted accordingly.
Choose your area wisely
The choice of area is highly dependent on the purpose of your investment. However, budget is also relevant here. Dubai real estate prices generally have expensive price tags. However, there are some areas where you can find relatively cheap properties, especially if you are far from the city center. If you intend to resell them at a higher price, they are better suited. Similarly, there are some areas that can produce better results for those who want to rent out the property. The crux here is to choose the neighborhood wisely. It shouldn’t be rushed. Rather, take your time and know about the pros and cons of the selected areas. Furthermore, take into account the future market trends that have the potential to influence the area. For example, areas located close to the Expo 2020 Dubai site witnessed a major improvement in terms of the sales price and rental value as the marquee event commenced.