Everyone wants a secure future. In most of the of scenarios, real estate proves to be the most reliable investment and source of income. As the world continues to grow and as people continue migrating to developed metropolitan cities, residential properties will always be one of the most basic human needs for living. And when it comes to investing in the most rewarding and viable real estate market, Dubai remains on the top of the list.
These lines are the crux of the reasons why so many people prefer becoming real estate investors. And seeing the promising returns on investment (ROI) and countless new opportunities popping up every other day, almost every second real estate expert suggest that why you must invest in Dubai?
Real estate investment can be challenging
When it comes to investing in Dubai real estate, there are numerous examples of people who have earned themselves a fortune with this investment. The success rate encourages every potential buyer to invest in properties for sale in Dubai but jumping up the bandwagon without conducting any research, can be equally challenging and highly risky.
Despite having stronger interest in real estate investment, many potential investors are not sure how to begin and where to invest in Dubai real estate for promising returns.
Scope of Dubai real estate investment
A successful real estate investor always stays one step ahead of others to reap maximum benefits. Here, we have jotted down a few pointers describing the scope of investment in Dubai real estate market and why investing in Dubai properties in still the best decision?
- Real estate investment is tax-free in Dubai and so is the personal income.
- Properties for sale in Dubai are tangible assets and you have full ownership of it.
- Investment in Dubai real estate offers a hedge against inflation and financial security. Moreover, the prices of properties appreciate over time.
- Working with estate agents in Dubai can help you foresee market trends and equip you to make a well-informed investment decision. To some extent, you can mitigate the risk associated with real estate investment.
- Unlike several other investment vehicles including stocks and crypto-currency, Dubai real estate market offers stability.
- In hours of need, an investment property or a buy-to-let property can either be used for personal accommodation or selling ahead.
- Real estate investment in Dubai offers a high rate of return and using these 5 ways, you can maximize returns on property investment.
How to become a pro real estate investor?
Before making any decision to invest in properties for sale in Dubai, brace yourself for answering some difficult questions.
Why do I want to invest in Dubai real estate?
Dubai real estate investment is a serious business like any other niche. Therefore, not just your intentions should be clear but also you must have a comprehensive investment strategy. Do you want to be an active participant? This includes buying and selling properties for sale in Dubai, buying and renting and started working as an active real estate agent.
Other strategy that may work for you is to collaborate with other investors and invest as a group in properties for sale in Dubai for recurring cash-flow streams and long-term investment. You can buy multiple properties and hire a property manager as well to handle their day-today management.
Keep your emotions aside
One of the biggest traits that can help you grow in this field is not to let your emotions play with you. When it comes to buying a home or property for sale in Dubai, people let emotions take the steering wheel of investment vehicle. On the contrary, logics should play major role with a small emotional quotient for your home because it will be the place where you plan to live for many years to come.
However, these same emotions must take back seat when it comes to buying an investment property in Dubai. The major difference is that it is purely a business investment and weigh against every parameter to make a viable investment decision. After selecting a property in Dubai, you must also logically negotiate to close the deal at the best possible price. You must use every tactic to negotiate the price, because the lower the price, the better the odds that you will earn higher profit from it, in future.
Location is king
After selecting the type of property you plan to invest in, location is still the most important factor for closing a viable investment deal. Location plays a crucial role in deciding between a successful and not-so-successful real estate investment. A majority of property brokers in Dubai state that in order to maximize your investment and rental yield; proximity to communal facilities including open green spaces, healthcare facilities, public transport, entertainment facilities and supermarkets can play a major role.
It is observed that a nicely managed property in Dubai at main location can drive consistent growth along with attracting tenants. A major factor that distinguishes a pro real estate investor from others is always his quirky and decisive nature. He must be quick to spot the trends and faster to adopt them before they become mainstream ideas.
Understand different cash flow and profit options
Cash flow refers to the amount that is left after meeting expenses. A positive cash flow is key to a good rate of return on an investment property. It is not necessary that you will start getting immediate returns in form of rental prices but the property might bag enough cash for you in future in form of capital value. Therefore, you must develop different projections and pick the one that matches your investment strategy.
You can expect cash flow in form of rental income and can also expect increase in intrinsic value due to long-term capital value appreciation. And when it comes to calculating profit opportunities, you can also conduct cost-benefit analysis of renovation before selling the property to get a better price. And a cost-benefit analysis can also be done to assess mortgaged loans vs. value appreciation.
Off plan vs. Ready-to-move properties in Dubai
Dubai off plan properties is a burgeoning investment sector and can also be one of the most viable investment opportunity. Off plan properties for sale in Dubai are available at attractive prices and also come with the option to customize and modern facilities. However, the risks can be delays and the quality of construction and furnishing items upon handover. Though ready properties for sale in Dubai are pricier as compared to off plan properties but also offer convenience, faster access, and established facilities.
When it comes to choosing between off plan and ready properties, budget plays the most significant role but a few other things to look for include:
- For off plan properties, you must review previous projects of the said development company and also review their handovers. Also conduct a thorough research about the developer’s reputation.
- For ready projects, review the quality of properties and check appraisal reports to get clear picture.
- Also consider hidden and on-going costs of these properties including monthly maintenance costs, outstanding dues, and any other hidden charges. These all costs can impact the cash flow.
- Also understand whether the property is freehold or leasehold. If you want to know more about these two segments click to read freehold vs. leasehold properties in Dubai – what you must know before investing?
Choose your team carefull
It is mostly observed that newbie investors take Dubai real estate investment as a hobby and not as a serious business. Therefore, they prefer partnering up with their friends and family members instead of talking to real estate agents. You may choose a friend due to the trust factor he garnered over the years but having a seasoned real estate broker in Dubai (right at the location, where you intend to buy) is essential.
Developing a team can take a while but having professionals around you to look up to in every situation is absolutely worth it in the long run. These experts can educate you about the market trends and can also help you grab a good deal in your chosen area.
The bottom line
Despite ubiquitous advertisements claiming that investing in Dubai real estate is a sure way and easy way to create success. However, it is a challenging business opportunity that needs expertise, knowledge, planning and undivided attention. Therefore, it is important to consider certain factors including the ones listed here and equally crucial to talk to industry experts to help make an educated investment decision.
Call the HFRE sales experts at +971 4876 2473 or write us at info@hfre.ae and we will help you shortlist a number of properties dotted across the city along with a wealth of knowledge to make a well-informed investment decision.
