Is real estate investing in Dubai profitable?

dubai profitable investment

Adam Properties provides all the answers to investors on the question of whether real estate investment in Dubai is profitable, as this question occupies the minds of many who want to invest in real estate in Dubai.

Real estate investing in Dubai can be a challenging journey, so here’s how you want to know if you want to settle and live in Dubai (whether by purchasing or renting real estate).

Is real estate investing in Dubai profitable?

Although many people view real estate investing as a traditional and reliable way of developing wealth.

And even giving them the opportunity to live in the country they love, except that recently, and for various reasons.

Not many people want to cover up this investment, not because of various reasons. It is always more difficult to anticipate market changes.

Of course, for many people, deciding to buy or rent a home can be a difficult problem.

Therefore, it is imperative that you are aware of a large number of variables that will help you determine your preference for one of the two options over the other.

Despite the uncertainty surrounding investment decisions in this area.

The Dubai real estate market remains strong due to a series of factors that have been making Dubai’s investment environment attractive for a long time.

We are talking about a large, vibrant city of 3.1 million people in more than 200 different countries.

Despite their differences, they still consider it their second birthplace, making Dubai a multicultural city.

In recent years, the country has also loosened strict restrictions on the issuance of residency visas in the past.

This allows more people wishing to live in the emirate to realize their dreams without any effort.

In this regard, perhaps the most prominent development is allowing some foreigners to obtain residence permits for a period of ten years.

Another important factor supporting Dubai’s appeal is that the emirate’s real estate investment has achieved an annual rate of return of 7%, which is higher than the average rate of return (4%) in other countries / regions with large numbers of foreign immigrants such as Singapore and Hong Kong.

Real estate investment in Dubai

There are still some attractive underlying economic and demographic factors.

These factors are not always sufficient to convince potential buyers or renters to spend the large amounts required for real estate investment, and many other factors must be taken into consideration.

For example, current law requires homeowners to pay at least 25% of a property’s value as a down payment on their first purchase in the UAE.

Of course, for many people, paying at least 600,000 dirhams for a three-bedroom apartment is no easy task.

That is why you must ensure the accuracy of your selection and carefully select the right market before making any major investments.

These complications have led many people to prefer renting out rather than owning property.

However, this does not mean that there will be no problems or challenges with the rental option.

In fact, you don’t need to pay as high a down payment as you did when you bought it, but you might feel frustrated not to live at home.

Especially because there is not enough money to make the necessary adjustments in the home unless the owner agrees or even has the intention to change the status quo.

Also, don’t forget that the monthly rent is usually higher than a mortgage, which many residents may not like.

In short, it can be said that identifying the typical financial options when buying a home is a double-edged sword.

Adam Properties for Real Estate Consulting provides some advice that you should consider when considering real estate investment in Dubai, which are the following:

Real estate investment in Dubai

Advance payments for real estate purchases in Dubai

Everyone who intends to buy a property in Dubai should know that he needs to pay some fees in advance, and this is not limited to the down payment (deposit) when buying the house.

There are some administrative fees that cannot be waived.

These additional costs will greatly increase the actual cost of buying a home, which is why these costs must be factored in when buying.

For example, the buyer will need to pay a commission to the broker that facilitated the purchase, in addition to a mortgage application processing fee.

The Dubai Land Department also charges many administrative fees.

The most important of these may be the ownership transfer fee, which represents 4% of the property’s value, in addition to another administrative fee of 580 dirhams.

Please note that you will have to pay this fee within a short period of time, otherwise its value will double, and you may have to pay a fine of up to 10,000 dirhams.

Tenants may also be required to pay some fees up front which may also surprise them, for example, some Dubai landlords require tenants the right to pay the annual rent in full in advance.

Although some foreigners may prefer to pay the rent.

Let’s assume it’s worth less than your monthly mortgage payments.

But he might be surprised that he needs to find a lump sum rent instead of the monthly repayment.

Therefore, the tenant must be prepared to pay the fees required by the property owner in advance as this is a common occurrence in Dubai.

Buying and renting real estate in Dubai

Whether you are buying or renting a home in Dubai, you will need to pay an annual maintenance fee.

For example, according to National Daily estimates, the annual maintenance fee for a three-bedroom home in Dubai ranges from 700 to 100,000 dirhams.

Because these expenses cannot be eliminated, they must be taken into consideration before making a decision.

Homeowners in the UAE must also pay some additional fees, especially for expats, such as paying an annual fee, the value of which varies according to the size of the house.

Tenants cannot avoid paying some of these regular fees. For example, the tenant will pay an annual fee to certify the lease.

Duration of stay in Dubai

In order to know whether real estate investment in Dubai is profitable or not, you must be fully aware of the time of your stay.

My Bayut recommends making a choice before starting to buy, especially if he intends to live in Dubai for a long time.

For travelers or people who want to work in different places, a long-term stay may not be ideal.

For those who plan to live in Dubai permanently, owning a home might be the right decision.

Gulf News offers advice for expats who plan to live in the UAE for more than 15 years.

To take advantage of real estate purchases.

The advice is based on the fact that expats may have to pay up to 40% of the UAE’s monthly income for in the long run?

The UAE will significantly save housing costs.

According to the newspaper, in the long run, the cost difference between the rental fee and the purchase premium could be a significant amount.

The biggest advantage of choosing a property is that it will provide you with an opportunity to sell the house and earn an income in it. a

Pay all the expenses that you pay and get additional profits, for example the tenant pays a maximum of 2.16 million dirhams in rent within 20 years.

If he decides to buy a house of the same size, he will pay only 1.67 million dirhams during the same period.

Please note that these accounts do not include some additional fees or expenses that the tenant or home owner may need to pay in the purchase or rental price.

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