Dubai is recognized as the fastest growing city and Dubai real estate is dubbed as one of the most dynamic real estate markets in the world. The investment opportunities come with low risk and the potential for high and promising returns on property investment. Dubai real estate has shown unprecedented growth over the last decade and utmost stability during the global pandemic, with new investment opportunities becoming available every other day.
Though the growth of the Dubai realty market was temporarily halted by COVID-29 induced global but it was soon back on track and the official statistics of 2021 indicate it. This trend is expected to continue for many years to come – making it a solid investment choice for both short and long-term goals.
How to maximize return on investment (ROI)?
Investing in Dubai rental properties is an excellent way to generate a stable secondary income, which can help you create an investment portfolio and move up to the next rung of the wealth ladder. However, every newbie investor has this question in mind that how to maximize return on property investment when buying in Dubai.
Investing in properties for sale in Dubai is one of the proven ways to make money both in the short and long run but you must understand that not all properties are designed equally and not all properties can promise equal returns. Yes! Not all of them bring the same kinds of returns for investors.
To make the most of your investment, you must check the following guide to buying a property in Dubai. It can help you choose the most profitable investment property in Dubai.
Location is the most important consideration
When it comes to earning maximum return on property investment, it is important to choose the right kind of property at the right location, in the right project. All these “rights” play a significant role in deciding what to expect in form of return from your property investment, in years to come. Dubai real estate sector offers a number of options to choose from, so you can create a varied portfolio for yourself with different types of properties. For instance, from studio apartments to townhouses, from 1 bedroom apartments to penthouses, and from villas to hotel apartments.
Similarly, you can pick from several great communities and projects in Dubai such as Dubai Creek Harbour, Downtown Dubai, Dubai Marina, and Dubai Hills Estate. Depending upon your budget and personal choice, you can make the right property investment choice in Dubai.
Understand the market trends to determine rate of return
Before parking your hard-earned money in real estate, you must understand the concept of the rate of return. The current situation of real estate market determines the property price, average rental price and occupancy rate. When a market determines the rate of return on property investment, you must learn the market trends.
It is not always advisable to invest in prime properties but what matters the most is a project or community with reasonable home values, strong rental and capital growth on year on year basis, population growth, occupancy rate and even now Airbnb rental rates and bookings. The sales team of HFRE can help you determine the best property and the best area for buying a conventional and an Airbnb-friendly investment property anywhere in Dubai. We will present you with a thorough analysis of the neighbourhood that will help you determine where to focus your investment property search for maximum profitability.
Focus on the value add-ons
A major chunk of return on property investment depends upon how modern a property is and how well it is maintained. A property buyer is always concerned about the location and condition of the property, after finalizing his budget. A tenant also looks for a property that looks good and comes with modern add-ons. To earn the best possible yield, you must improve the property with multiple features that can add to its value.
Real estate agents suggest enhancing the value of your property with features like installing modern appliances, an automated security system, storage space and additional parking facilities. If you have invested in apartment development, pay close attention to the quality of communal facilities provided by the developer. If the building has a properly maintained swimming pool, a fully equipped gym, dedicated kids’ play area – tenants are likely to be more inclined toward this kind of development. Eventually, it will affect the occupancy rate, which will translate into an increased return on property investment.
Invest in energy-efficient property developments
If you know Dubai, you must know its extreme weather condition, too. The weather remains hot and humid throughout the year, which means air condition appliances also keep working the entire year. More air conditioning means higher energy bills. When it comes to investing in a property for sale in Dubai, it is imperative to look for energy-efficient options to minimize the utility bills. When a property offers direct savings on energy bills, it will surely be more appealing to the tenants due to this characteristic, particularly.
There are many reasons to invest in Dubai real estate. The Dubai government has taken initiative to apply green building specifications to all buildings in Dubai to make it a healthy city that follows the highest standards of sustainable development. The aim is to be resource-efficient in terms of energy, water and materials consumption. Energy-saving systems are already there in several apartment developments across major communities such as Business Bay, Dubai Creek Harbour, Downtown Dubai and Dubai Marina. These upgrades will contribute to offsetting carbon emissions and reducing energy bills.
Set up an optimal rental price
Though you have invested in properties to make the most of your investment and earn maximum rental yield but the market dynamics may not be always be rational. Whether you are renting for a short or long term basis, deciding on the correct rental price matters a lot. Setting up a lower rental price means that you are missing out on the opportunity to make a handsome return on property investment. Similarly, setting a high rental price means that you cannot compete with your neighbourhood properties. It means the property may remain vacant for most of the months in a year, which means you are losing the income.
The safest bet is to determine the market rate and set a rental price comparable to the other rental properties in the same neighbourhood. It will increase the return on property investment. And when it comes to determining a fair rental price, you can take help from HFRE rental market experts. We are always there to help you choose the best investment property in Dubai and also to determine the estimated rent for your property.